Billionaire entrepreneur Mark Cuban says the recent crypto market cataclysm triggered by the collapse of FTX has more to do with banking failures than crypto itself.
The Shark Tank investor tells his 8.8 million Twitter followers that FTX’s insolvency is no different from past crises in the traditional financial world.
“These blowups have not been crypto blowups, they have been banking blow-ups. Lending to the wrong entity, misvaluations of collateral, arrogant arbs, followed by depositor runs. See Long Term Capital, Savings and Loan and Sub-Prime blowups. All different versions of the same story.”
Cuban says that contrary to popular belief, crypto is not an unregulated industry. According to the investor, officials could do more to act on existing regulations rather than coming up with more.
“Everyone is saying that crypto is unregulated. Not true. The SEC says that they regulate crypto. Ask Kim Kardashian and the tokens they have sued or settled with. The question is, given the visibility of the central[ized] exchanges, why hasn’t the SEC already knocked on their doors?”
Cuban also reveals his thesis for why he decided to invest in the crypto space in the face of all the current uncertainty.
“A basic question. Why have I invested in crypto? Because I believe smart contracts will have a significant impact in creating valuable applications. I have said from day one, the value of a token is derived from the applications that run on its platform and the utility they create.
What has not been created is an application that is ubiquitous. One that is obviously needed by everyone and they are willing to go through the learning curve to use. Maybe it never comes. I hope and think it will.
The best analogy I can use is the early days of streaming. The sh*t people had to do to listen to a 16k stream of music was insane. An internet subscription for your dial up modem. Download the provider client. Download a TCP/IP client. Download the streaming client.
Click on a batch file on a website. Make sure it all worked together. All while being laughed at for just not turning on your radio or tv. But for in office or out of market, it was worth it. It started as niche in 1995. Now realize that smart contracts are about five years old.”
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