The cryptocurrency market is experiencing a large-scale sell-off. Yesterday, Bitcoin and Ether – the two largest cryptocurrencies in the world by market capitalization – fell below $26,000 and $2,000, respectively.
According to billionaire Mark Cuban, the owner of the Dallas Mavericks basketball team and also a cryptocurrency investor, the drop in the cryptocurrency market resembles the dotcom bubble of the early 2000s.
In the late 1990s, speculation drove the valuations of Internet-based companies to skyrocketing, sending the Nasdaq Composite stock market index up 400 percent over a five-year period before crashing in 2001. and 2002.
“The crypto market is going through a lull like the internet was before,” Mark Cuban tweeted earlier this week.
According to the US billionaire, “after the initial growth of interesting applications” and NFT, cryptocurrencies are entering the “mimicry phase” where too many companies are not bringing new utility to the market.
Mark Cuban predicts that the blockchains that emerge after this lull will be those that use “smart contracts to improve business productivity and profitability.”
Smart contracts are digital agreements encrypted and stored on the blockchain that provide decentralized finance or DeFi, applications and NFTs. Blockchain is especially necessary for the formation of decentralized autonomous organizations (DAOs).
“Copy strings will fail,” Cuban said. “We don’t need NFT or DeFi on every chain.”
Share more with CNBCthe well-known investor said he’s not sure if the crypto market will fall further.
This is not the first time the Dallas Mavericks boss has compared cryptocurrency to web development. Earlier last year, Cuban said the rise of blockchain technology reminded him of the “early days of the Internet” and current blockchain companies similar to Internet pioneers such as: Broadcast.com – the company he sold to Yahoo in 1999 and made him a billionaire.
“It took a long time for the Internet to become cheaper enough to stream and reach many people. We have had 20 years to develop the Internet. However, this number with cryptocurrencies is only 10-12 years,” said Mark Cuban.
Cuban’s portfolio includes various cryptocurrencies, NFTs, and investments in several blockchain companies.