The recent cryptocurrency market crash has investors fearful of what could happen in the future, according to the billionaire Mark Cubanwho also stated that the drop will have a “cleansing” effect on the market.
In an interview with Fortune, the Shark Tank investor said that cryptocurrency projects will disappear from the map and the bear market will continue and some digital assets will crash.
“In stocks and cryptocurrencies, you will see companies that were backed by cheap, easy money, but had no valid business prospects, will disappear.”
Cryptocurrencies will disappear from the map
Kuban said that the collapse of the cryptocurrency Terra (Luna) it had a domino effect on the cryptocurrency industry. Just this week, two big companies, Celsius Network Y Three Arrows Capitalfaced insolvency problems.
At the same time, the cryptocurrency market capitalization is falling and is now below $1 trillion.
“The cryptocurrency market has seen an explosion of failed and troubled projects in the midst of a severe recession making investors wary of what comes next. As Warren Buffett says: “Only when the tide goes out do you know who is swimming naked,” said Cuban.
Despite the negative sentiment prevailing in the industry, the billionaire believes that this is a temporary phenomenon.
According to Cuban, the cryptocurrency market crash “will have a cleansing effect and will be a source of innovation.”
“Disruptive applications and technologies launched during a bear market, whether it be stocks, cryptocurrencies or any other business, will always find a market and be successful,” he said.
In May, Mark Cuban suggested that most companies using NFT and DeFi would leave the market, leaving only companies that have unlocked the potential of smart contracts.
The billionaire also claimed that since cryptocurrencies tend to be correlated with stocks, interest rate hikes by the US Federal Reserve could cause both investment classes to run into trouble.
Cuban further said that bear markets are beneficial for the evolution of cryptocurrencies as developers are forced to innovate and solve real-world problems using digital assets.
Welcome to the bear market
Many crypto experts agree with Cuban when it comes to the benefits of the bear market.
speaking after the moon collapseseveral big names have come forward to say that the market will get rid of projects with no real value, which is good for the market in the long run.
Web3 Foundation CEO Bertrand Perez was one of the names to say that there are many tokens and projects that need to be phased out.
Ripple CEO Brad Garlinghouse agreed with Perez and questioned whether the cryptocurrency community really needs more than 19,000 coins.
FTX US President Brett Harrison emphasized that there are only a handful of projects with real value.
“There probably won’t be hundreds of different blockchains in 10 years, I think there will be some clear winners for different types of applications”.
Polygon CEO Mihailo Bjelic agreed, saying the current bear market is a healthy correction. This will benefit the space in the long run by eliminating unworthy projects.