Mark Cuban Says FTX Implosion Isn’t Crypto Blowup – Explains Why He Invests in Crypto
Mark Cuban clarified on Twitter Saturday that the implosion FTX was not a crypto-blowup. Cuban tweeted this comment on his Shark Tank star Kevin O’Leary addressing why the collapse in crypto exchange is a turning point for the industry:
These blowups were not crypto blowups; they were banking blowups.
The Shark Tank star explained that ‘Lending the wrong entity, misvaluations and collateral, arrogant arbitrages, followed closely by depositor runs’. “See long-term capital, savings and loan and subprime blowups. There are many versions of the same story.
Many Twitter users agreed with Cuban. One Twitter user said: “There was nothing specific regarding crypto… Other recent blowups (3AC), Celsius, Voyager and Blockfi) were all essentially tradefi-style blowups (too many leverage, poor collateral, poor hedging liabilities from client deposits and fraud).
Kevin Hobbs, CEO of Aventus Ventures, wrote that “This is true.” The biggest crypto bubbles have been caused by the centralized crypto companies, which are heavily invested by bankers and run by ex-bankers. He said that decentralized finance (defi), is needed with new regulations for today’s world.
Tony Edward, host of Thinking Crypto, agreed with Cuban and stated:
Mark is correct. This was not a crypto-failure, but a scammer exploiting investors and the absence of regulation. Bitcoin, Ethereum and XRP are all on the same page. To rebuild trust with the mainstream, it will take time before a major brand institution adopts crypto.
Why Mark Cuban invests in Crypto
Cuban also shared his reasons for investing in crypto despite the recent market declines after the FTX failure in a tweet. Sunday’s tweet from the Dallas Mavericks owner:
A basic question. Why did I invest in crypto? Because smart contracts are going to have a major impact on creating value-added applications.
He clarified that he has stated from day one that the value of a token derives from the applications it runs and the utility they create.