“Shark Tank” fame investor Mark Cuban said some companies could face an existential crisis in the cryptocurrency downturn.
What Happened: Cuban, a known Dogecoin (CRYPTO: DOGE) and Ethereum (CRYPTO: ETH) bull, said, “In stocks and crypto, you will see companies that were sustained by cheap, easy money—but didn’t have valid business prospects—will disappear,” reported Fortune.
The Dallas Mavericks owner invoked Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) CEO Warren Buffett in an interview with Fortune.
“When the tide goes out, you get to see who is swimming naked,” said Cuban.
Cuban did touch on a silver lining and said disruptive applications and technology will always find a market despite bearish conditions, whether it is in stocks or cryptocurrency segments, according to Fortune.
See Also: How To Get Free NFTs
Why It Matters: Cuban pointed out the correlation between Nasdaq and cryptocurrencies, reported Fortune.
“If rates go up, it will struggle till it’s priced in,” said Cuban on cryptocurrency price movements and interest rates. “The exception, as with stocks, is for new, game-changing applications.”
The Nasdaq has declined 29.27% since 2022 began, while Bitcoin (CRYPTO: BTC), Ethereum, and Dogecoin have fallen 56.9%, 71.3%, and 67.7% respectively.
In recent days, rumors have swirled around the impending insolvency of Three Arrows Capital, a hedge fund firm that suffered heavy losses due to its exposure to Terra Classic (LUNC) — a project that collapsed after its algorithmic stablecoin lost its peg to the dollar.
Last month, Cuban commented on the cryptocurrency lull and compared it with the one that the internet went through in the 2000s.
“The chains that copy what everyone else has, will fail. We don't need NFTs or DeFi on every chain,” said Cuban at the time.
Read Next: Dogecoin Co-Founder Takes Swipe At Crypto VCs: Web3 Has Nothing To Offer To Content Creators
Photo via Gage Skidmore on Flickr
