- Mark Cuban compared the cryptocurrency boom to the dot-com bubble, recommended buyers hedge their bets, and warned them about the dangers of debt in a string of tweets this week.
- “Watching the cryptos trade, it’s EXACTLY like the internet stock bubble,” the “Shark Tank” star and billionaire owner of the Dallas Mavericks said.
- Cuban sold his startup to Yahoo in 1999 and managed to protect his billion-dollar windfall when the market crashed a few months later. “My advice? Learn how to hedge,” he tweeted.
- “If you are taking on debt that you can’t afford to pay back to invest in crypto (or stocks or currencies), YOU ARE A FOOL and there is a 99% chance you will lose EVERYTHING,” Cuban added.
- Visit Business Insider’s homepage for more stories.
Billionaire investor Mark Cuban compared the Bitcoin boom to the dot-com bubble in a flurry of tweets this week, predicting a large number of cryptocurrencies won’t survive the coming crash.
“Watching the cryptos trade, it’s EXACTLY like the internet stock bubble,” the “Shark Tank” star and Dallas Mavericks owner said. The cryptocurrency market recently achieved a $1 trillion market capitalization for the first time, as Bitcoin and other digital coins more than quadrupled in value over the past year.
“I think Bitcoin, Ethereum, a few others will be analogous to those that were built during the dot-com era, survived the bubble bursting and thrived, like Amazon, eBay, and Priceline,” Cuban continued. “Many won’t.”
Cuban sold his internet-radio startup, Broadcast.com, for $5.7 billion to Yahoo in 1999. He received $1.4 billion of the search giant’s stock as a result, and swiftly enlisted Goldman Sachs to help protect his windfall as he recognized the frenzy around technology stocks wouldn’t last much longer. He advised crypto buyers to follow his lead and hedge their bets too.
“MANY fortunes will be made and LOST as we find out who has the stomach to HODL and who doesn’t,” he tweeted, using the acronym for “hold on for dear life” which is popular among crypto fans. “My advice? Learn how to hedge.”
The tech billionaire also cautioned crypto buyers against overextending themselves financially.
“If you are taking on debt that you can’t afford to pay back to invest in crypto (or stocks or currencies), YOU ARE A FOOL and there is a 99% chance you will lose EVERYTHING,” he said. “Personal disaster stories are built on leverage.”
Finally, Cuban downplayed claims that crypto is an alternative to fiat currency or a hedge against currency debasement, describing them as “sales pitches.” Insiders also tried to justify the sky-high prices of internet companies in the late 1990s, he pointed out.
“Crypto, much like gold, is supply and demand driven,” he tweeted. “The biggest sales pitch is scarcity vs demand. That’s it.”
Cuban’s warnings about crypto echo his comments last year on the day-trading boom. He said the rush of retail investors into Hertz, JCPenney, Kodak, and other questionable stocks “feels just like” the dot-com bubble.
“You’re doing the same thing they did in the late ’90s,” Cuban continued. “You’re rolling it. You think everybody is a genius in a bull market.”
“‘I have to go all in’ – that’s the type of thing that we saw exactly in the internet bubble,” he added.
The post ‘Shark Tank’ star Mark Cuban compares the Bitcoin boom to the dot-com bubble, warning many cryptocurrencies won’t survive the coming crash | Currency News | Financial and Business News appeared first on TechFans.