Mark Cuban, an American entrepreneur and investor, compared cryptocurrencies with the dot-com bubble and added that there is a 99% chance of losing everything in the crypto market.
In a series of tweets on Monday, the owner of the NBA’s Dallas Mavericks mentioned that only a few digital assets will survive the bubble burst. He showed bullish sentiment for Bitcoin and Ethereum by comparing the top two crypto-assets to internet companies like Amazon and eBay but added that many cryptocurrencies will not survive in the end.
Cuban outlined that the crypto market is driven by the concept of supply and demand and all the other narratives are just sales pitches. In his opinion, ‘scarcity vs demand’ is the biggest sales pitch in the case of the crypto market.
“Watching the cryptos trade, it’s exactly like the internet stock bubble. I think Bitcoin, Ethereum, a few others will be analogous to those that were built during the dot-com era, survived the bubble bursting, and thrived, like Amazon, eBay, and Priceline. Many won’t. But, If you are taking on debt that you can’t afford to pay back to invest in crypto, you are a fool, and there is a 99% chance you will lose everything. Personal disaster stories are built on leverage,” Cuban mentioned on Twitter.
Additionally, he raised the issue of the valuation of crypto assets. Bitcoin and other digital currencies are up nearly 20% since the start of 2021 despite the recent crash. Bitcoin is currently trading near $35,000 and Ethereum jumped above $1,100. So, Cuban addressed the pricing and valuation issues associated with the crypto market.
“During the internet stock bubble, ‘the experts’ tried to justify whatever the pricing of the day is. Crypto, much like gold, is supply and demand-driven. All the narratives about debasement, fiat, etc are just sales pitches. The biggest sales pitch is scarcity vs demand. That’s it,” he added.