Mark Cuban, an American television personality and entrepreneur, believes that the current trend in the Bitcoin market is comparable to the dot-com bubble burst, which was caused by a great deal of speculation that inflated the stocks of internet companies. Cuban made this comparison in a recent interview.
Bitcoin had been on a rally and set a record for another all-time high price, which was over $40,000 at the time. Nevertheless, as the analysts had anticipated, an impending wave of correction brought the asset’s price down to as low as $31,000 not long ago, registering a drop of 20% along the way.
The billionaire predicted that Bitcoin and Ethereum will one day be comparable to businesses that were able to thrive after the collapse of the dot-com bubble. He seemed to be implying that the two largest cryptocurrencies have the potential to not only survive if the bubble in the cryptocurrency market bursts but also to continue to thrive; this is similar to how Amazon, EBay, and Priceline managed to survive the bear markets of 2000 and 2001. In addition, Cuban is of the opinion that the vast majority of other cryptocurrencies will not survive, as he stated in a tweet:
Observing the trading of cryptocurrencies reveals that the situation is EXACTLY the same as the internet stock bubble. EXACTLY. I believe that btc, eth, and a few other cryptocurrencies will be analogous to those that were built during the dot-com era, survived the bubble bursting, and continued to thrive, such as Amazon, eBay, and Priceline. Many won’t
— Mark Cuban (@mcuban) January 11, 2021
In addition, Cuban stated that “just as they did during the height of the dot-com bubble, the experts try to justify whatever the pricing of the day is.”
JPMorgan found that Bitcoin users in their twenties and twenties are choosing to invest in “digital gold” rather than physical gold bullion, which could lead to an increase in the price of the asset to $146,000.
Because of the limited supply of the cryptocurrency and the favourable demand in the market, even the macro investor Raoul Pal predicted that Bitcoin would skyrocket to $1 million in approximately five years’ time.
On the other hand, according to Mark Cuban, cryptocurrency was very similar to gold in that it is “driven by supply and demand.” He asserted that stories about “debasement, fiat, and other such things are just sales pitches,” and he added:
The primary selling point is the imbalance between supply and demand. The end of it
Cuban had previously referred to Bitcoin in 2019 as a collectible and stated that he believed it had “no chance” of becoming a trustworthy currency. He referred to it as a religion rather than a monetary solution and stated that as long as people accepted Bitcoin “as a digital version of gold,” it would continue to be investable. He was referring to Bitcoin as a digital version of gold.
The self-made billionaire who amassed his wealth by selling tech-focused companies to Yahoo and others gave the following advice to investors: “Learn how to hedge,” and he said:
Along the way, there will be MANY fortunes made and LOST, and we will learn who has the stomach to HODL and who does not. My recommendation? Figure out how to hedge your bets.