Over the past few weeks, many leading cryptocurrencies have seen their value drop sharply. The price of Bitcoin has fallen from over $ 46,000 a week ago to under $ 33,000 at the time of writing. Dogecoin also fell precipitously from north of $ 0.50 on May 16 to below $ 0.30 today, while Ethereum has fallen from over $ 3,500 last week to now around $ 2,000.
“I think it’s the ‘Great Unwind’. Traders borrow to buy Eth, used eth to borrow alt / stable coins, used it to LP high APY pair, took SLPs and bet them at maximum return. The minute Eth drops to their tragic number, they must have relaxed. Unstake, Remove Liqudity, Repay, “Cuban, which is worth around $ 4.4 billion according to Forbes, tweeted on Sunday.
The billionaire is well known as one of the main “shark investors” in the popular ABC reality TV series. Shark aquarium. Cuban also owns the Dallas Mavericks in the NBA.
Cuban’s comment came in response to a post from Larry Cermak, research director at The Block, who describes himself as the “first and last word when it comes to digital assets.” Cermak had retweeted a February article in which he wrote: “The implication of making Ethereum projects 1: 1 forks but on all the other competing L1s is actually greater than people think. There is a ton of L1 and the ratings are already extensive even on Ethereum. The dilution of buyers and money can cause serious problems for IMO. “
Captioning his retweet, Cermak added, “It took a lot longer than I thought, but IMO a big reason we are seeing 60% super fast crashes is that there was just too much from projects stretched to crazy valuations and not enough cash to support prices when new demand dries up. Add leverage and voila »
In a post following his initial comment, Cuban wrote, “It gets worse when a Double Tragic Number hits those who have been around long enough not to think they would ever be affected. When they are affected, it means mostly dry. the powder which was used to maintain the support levels is also unwound. “
Cuban later said Newsweek in an email that “the more useful the platform, the more successful it will be.”
“At the end of the day, all crypto is software and the best performing software has happy users who can’t do without it and are willing to pay enough to keep them vibrant,” he wrote. “If there’s one thing crypto enthusiasts lose sight of, it’s that at its core there are a lot of participants, from token holders to validators, miners and the like all receive rewards. [sic]. »
“These rewards are only of value if the income is sufficient,” added Cuban. “So speculation aside, the best platforms will do well in the long run. “
Bitcoin was the first decentralized cryptocurrency and was released as open source software in 2009. Although it was initially only worth a few cents, a bitcoin has skyrocketed to be worth tens of thousands of dollars today. , its value peaking earlier this year at over $ 63,000.
Other cryptocurrencies, such as Dogecoin and Ethereum, have become popular with investors in part because of their significantly lower price and the hope that their value will skyrocket in the years to come. But the cryptocurrency market remains volatile, with the value of different coins rising and falling rapidly and steadily.