The sudden and rapid collapse of the FTX cryptocurrency exchange sent shockwaves through the crypto space.
The fall, within a few days, of a company valued at $32 billion in February has finally made the entire fledgling industry of financial services, based on the Blockchain technology, suspicious.
Confidence in the industry is at an all-time low. Retail investors have fled, while institutional investors linked to FTX and its sister company Alameda Research are still pricing their losses from their exposure to Sam Bankman-Fried’s empire.
While there are lessons to be learned from this disaster that threatens the entire sector, it is an understatement to say that it will take a long time to regain the lost confidence.
‘Lots of mistakes’
However, billionaire Mark Cuban has not lost faith. He continues to believe in the industry and assures that there is still a lot of value in the sector, despite the fall of FTX. He believes that crypto has its place and that you just have to look at the big picture.
“Separate the signal from the noise,” Cuban told TMZ. “There were a lot of people who made a lot of mistakes, but that doesn’t change the underlying value.”
Cuban said that, as long as consumers have viable options in the crypto world, he doesn’t foresee the currency going in the tank.
The Dallas Mavericks owner is currently the subject of a class action lawsuit related to the bankruptcy of crypto lender Voyager Digital, which he promoted in a partnership signed in October 2021. This partnership between Voyager Digital and the Dallas Mavericks had one mission: to promote cryptocurrencies by making coins more accessible through educational and digital programs.
“Cuban and Ehrlich, as will be explained, went to great lengths to use their experience as investors to deceive millions of Americans into investing—in many cases, their life savings—in the deceptive Voyager platform and purchasing Voyager Earning Program accounts (“EPAs) “), which are unregistered securities,” the class-action suits said, also referring to Stephen Ehrlich, who was CEO of Voyager.
“As a result, more than 3.5 million Americans have now lost almost more than $5 billion in cryptocurrency assets.”
Voyager filed for bankruptcy as collateral damage from a credit crunch caused by the sudden collapse of sister cryptocurrencies Luna and UST on May 9. Millions of customers lost their savings. Assets of Voyager Digital were purchased by FTX, as part of the mortgage lender’s liquidation process.
“A basic question. Why did I invest in crypto?” Cuban wrote on Twitter on Nov. 13. “Because I believe smart contracts will have a significant impact on the creation of valuable applications. I said that from day 1, the value of a token is derived from the applications running on its platform and the utility they use. create. “
A smart contract is a piece of computer code that determines the terms of a transaction (loans, trading, etc.) and does not rely on any third party.
“What hasn’t been created is an app that’s ubiquitous. One that is obviously needed by everyone and they’re willing to go through the learning curve to use it. Maybe it never comes. I hope and think it will,” Cuban continued.
The billionaire then compared the crypto industry to the streaming industry, implying that bad ideas are likely to perish while good ones prevail.
“The best analogy I can use is the early days of streaming. The crap 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 ‘ n tcp/ip af client. Download the streaming client,” he argued. “Click on a batch file on a website. Make sure it all worked together. All while being laughed at because you just didn’t turn on your radio or TV.”
He concluded on a note of optimism.
“But for in the office or outside the market it was worth it. It started as niche in 1995. Realize now that Smart Contracts is about 5 years old.”
Cuban is involved in several crypto projects, including the very select Bored Ape Yacht Club, which represents a collection of more than 10,000 online images of monkeys in funny poses. Bored monkeys are the most expensive non-fungible tokens (NFTs).
He is what many in the crypto space have called an Ethereum maximalist, meaning he strongly believes in the potential of the second largest crypto ecosystem after Bitcoin. Ethereum is considered the internet of the crypto industry that aims to disrupt traditional financial services.