The abrupt and rapid collapse of the FTX cryptocurrency exchange has caused a shock in the crypto space.
The fall of a company valued at 32,000 million dollars in February, which occurred in just a few days, ended up casting suspicion on the entire young financial services industry, based on Blockchain technology.
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, continue to pin their losses on their exposure to Sam Bankman-Fried’s empire.
While there are lessons to be learned from this industry-wide disaster, it is an understatement to say that it will take a long time to regain lost trust.
‘Many errors’
Yet billionaire Mark Cuban hasn’t lost faith. He continues to believe in the industry and says that there is still a lot of value in the sector, despite the fall of FTX. He believes that cryptocurrencies have their place and you just have to look at the big picture.
“Separate the signal from the noise,” Cuban told TMZ. “A lot of people have 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 world of cryptocurrencies, he does not envision the currency going into the tank.
The owner of the Dallas Mavericks is currently the subject of a class action lawsuit related to the bankruptcy of crypto lender Voyager Digital, which he had promoted in a partnership signed in October 2021. This partnership between Voyager Digital and the Dallas Mavericks had one mission: to promote cryptocurrency to the make currencies more accessible through educational and digital programs.
“Cuban and Ehrlich, as will be explained, went to great lengths to use their investor expertise to deceive millions of Americans into investing, in many cases their life savings, in the deceptive Voyager platform and purchasing program accounts. of Voyager earnings (“EPA”), which are unregistered securities,” the class action lawsuits said, also referring to Stephen Ehrlich, who was chief executive officer of Voyager.
“As a result, more than 3.5 million Americans have now lost nearly $5 billion in cryptocurrency assets.”
Voyager filed for bankruptcy as collateral damage from a credit crunch caused by the sudden collapse of cryptocurrency sisters Luna and UST on May 9. Millions of customers have lost their savings. FTX had purchased the assets of Voyager Digital, as part of the mortgage lender’s liquidation process.
“A basic question. Why have I invested in cryptocurrencies?” Cuban wrote on Twitter on November 13. “Because I believe that smart contracts will have a significant impact on creating valuable applications. I have said from day 1 that the value of a token is derived from the applications that run on its platform and the utility they create.”
smart contract
A smart contract is a piece of computer code that determines the terms of a transaction (loans, transactions, etc.) and does not depend on any third party.
“What hasn’t been created is an app that is ubiquitous. One that everyone obviously needs and is willing to go through the learning curve to use. It may never come. I hope and believe it will,” Cuban continued.
The billionaire then compared the cryptocurrency industry to the streaming industry, implying that bad ideas are likely to perish while good ones will prevail.
“Best analogy I can use is the early days of streaming. The shit people had to do to listen to a 16k music stream was insane. An internet subscription for your dial-up modem. Download the client from the provider. Download a tcp/ip client. Download the streaming client,” he argued. “Click a batch file on a website. Make sure everything works together. All while being laughed at for simply not turning on the radio or TV.”
He concluded on a note of optimism.
“But to be in the office or out of the market, it was worth it. It started as a niche in 1995. Now keep in mind that smart contracts are about 5 years old.”
Cuban is involved with several crypto projects, including the very select Bored Ape Yacht Club, which features a collection of over 10,000 online images of apes in amusing poses. Bored Apes are the most expensive non-fungible tokens (NFTs).
He is what many in the crypto space call 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.
