Mark Cuban sees a consolidation phase coming in cryptos, which is a damn sight better than a nuclear winter.
The VIX, known as the fear index, jumped 35% last month on escalating war tensions in Eastern Europe and the COVID lockdowns in China are compounding supply chain problems and pushing cost-push inflation to 40 years highs.
Despite the doom and gloom, Mark Cuban sees a consolidation phase in risk assets, particularly cryptos coming next
It has been a tough five months, with virtually all assets being monkey hammered in the first quarter of 2022. In a risk-off environment, risk assets, such as the technology-laden NASDAQ, performed worse, with cryptos hit the hardest.
For example, Bitcoin and Ethereum hit an all-time high in November 2021. But since then, the most prominent cryptos have seen their value almost cut in half.
“Despite the doom and gloom, Mark Cuban sees a consolidation phase in risk assets, particularly cryptos coming next”
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Nevertheless, Mark Cuban sees the consolidation phase coming in cryptos.
The May 4 FOMC meeting with the Fed’s anticipated Fed hike rates 50 basis points and the explicit understanding made by the Fed that a 75 basis point increase is not something that the committee is actively considering sent stocks and cryptos rallying.
The Fed’s balanced tone resulted in the biggest gains for stocks since 2020.
Moreover, because 50 basis points were anticipated months in advance analysts and economists had already factored in the hike in their economic models. But the following day the market crashed.
So what happened?
On May 4 Fed struck a balanced tone and less hawkish stocks rallied. On May 6 US intelligence revealed to the media that it helped Ukraine sink the Russian flagship Moskva.Typically stocks fall one day before negative, bearing in mind insiders don’t get their news from the mainstream.
So the heavy sell-off could have been triggered by fears of Ukrainian Russian war escalating
Some historians will argue that May 6, 2022, was a declaration of WW3, where the US and its allies declared war on Russia.
The sinking of naval warships marks the beginning of all previous world wars. Britain sinking German ships in Jutland WW1, Japan sinking US ships in Pearl harbor WW2, and the Ukrainian and its allies sinking Moskva in the Black Sea, WW3?
“The sinking of naval warships marks the beginning of all previous world wars. Britain sinking German ships in Jutland WW1, Japan sinking US ships in Pearl harbor WW2, and the Ukrainian and its allies sinking Moskva in the Black Sea, WW3?
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Perhaps that is why everything was sold, including precious metals. In times of national emergency cash strapped governments confiscate property. Farmland is occupied by the army to feed starving urban populations. Citizens are forced to sell their gold below-market rates. Boats, jeeps, or anything with utility, during an extreme national crisis could be taken. So we see asset confiscation of rich Russians today, but if the war escalates and states are in a national crisis, citizens could also have their assets confiscated.
War bonds might be the only place where governments will encourage citizens to pour surplus capital. But if the state is defeated, then those bonds become worthless.
“There will be blockchains that, rather than die, get acquired or merge”
– Mark Cuban
Despite the deteriorating geopolitical situation, Mark Cuban sees the consolidation phase coming in cryptos
Mark Cuban was the cover face of digitally created wealth, and during the pandemic, he was a vocal advocate of cryptos believing that the space is worth taking seriously.
Mark Cuban made his first fortune during the 1990s first phase of the internet revolution, and he sees the same thing happening today in cryptos, which is facilitating web 3.0 characterized by data mining and smart contracts.
“Crypto is going through the lull that the internet went through,” Cuban tweeted on Monday. “The chains that copy what everyone else has will fail,” he added on Twitter. “We don’t need NFTs or Defi on every chain.
After a recent surge of “exciting” blockchain-based innovations in the crypto space—including non-fungible tokens (NFTs), decentralized finance (Defi), and play-to-earn applications—there’s been an “imitation phase” where new blockchains copy popular, existing applications and bring a variation of the same thing to market, said Mark Cuban in his tweet.
Mark Cuban compares cryptos space today with the dot-com boom in the 2000s, when internet startups behaved similarly, launching copycat products and promising returns, before the bubble burst.
But in the wake of the crypto bubble burst, Mark Cuban sees a consolidation phase coming in cryptos next.
Cuban told Fortune that there will be a “consolidation phase next,” where copycat blockchains will die out. “There will be blockchains that, rather than die, get acquired or merge.”
Mark Cuban sees the best opportunity now in crypto companies, and blockchains that use smart contracts or collections of code that execute a set of instructions on the blockchain.
Businesses that use smart contracts to improve productivity and profitability will gain a competitive advantage, said Mark Cuban in a tweet. “The chains that realize this will survive,” he tweeted
Indeed, cryptocurrencies with utility will grow, prosper, and are likely to offer investors the best returns.
The more secure the blockchain, the more utility it will provide for high-level transactions and the more valuable the blockchain is likely to be.
Mark Cuban made a fortune during a period when the web was in its infancy in the ’90s. His first big win was the sale of his computer consulting firm MicroSolutions. A second win for Mark Cuban came when his internet radio company, Broadcast.com, was acquired by Yahoo for $5.7 billion in stock.
Today, billionaire tech investor Mark Cuban sees the consolidation phase coming in cryptos
He now mostly invests in the crypto space, with a comprehensive portfolio of blockchain-related companies and cryptocurrencies.