Mark Cuban, the owner of the Dallas Mavericks and a billionaire crypto investor, says the current market collapse reminds him of a Warren Buffett proverb.
The rise and fall of cryptocurrency markets and initiatives, according to Cuban, is similar to the 91-year-old Oracle of Omaha’s saying, “Only when the tide goes out do you realize who’s been swimming naked.”
Cuban made the statement during a Thursday interview with Fortune, in which he examined what he considers to be faulty business strategies in some crypto companies that have struggled in recent months.
“Like Warren Buffett says, ‘When the tide goes out, you get to see who is swimming naked.’”
Current crypto market witnesses companies and investors suffering
Terra, Celsius, and Three Arrows Capital were among the corporations that appeared to be swimming naked.
By the middle of May, the Terra system, now known as Terra Classic, had entirely collapsed. Investors have lost tens of billions of dollars as a result of the collapse, and many regulatory organizations have launched a manhunt for the company’s founder and CEO, Do Kwon.
If the recent halting of withdrawals is any indication, Celsius, the staking and lending platform, is struggling to stay afloat. Three Arrows Capital, an investment firm, is said to have faced a $400 million liquidation after failing to pay margin calls.
Despite the bleak short-term picture for crypto, Cuban believes that downturns have a purifying impact on markets and that this time will be no different for crypto. However, he believes that you should constantly support innovation.
Marc Lasry, CEO of Avenue Capital Group, is even more pessimistic about the financial markets. On Bloomberg TV, he forecast that the suffering in the economy as a whole will last until the end of 2022, with equity indexes falling another 10%. Lasry, on the other hand, feels that the US economy is robust enough to keep the current dip short-lived.