In November 2021, the cryptocurrency space was in full madness mode. Call it cryptomania.
Retail investors, especially millennials and Gen Z, were investing heavily in cryptocurrencies and other crypto projects driven by FOMO, Fear of Missing Out.
Institutional investors were investing in crypto projects like those related to decentralized finance, which means financial services with no middleman.
Nonfungible tokens then arose, becoming the year-end buzzword. NFTs, which are a way to assert ownership of a piece of online content, like a photo or recording, were then seen as the future of art.
Facebook Chief Executive Mark Zuckerberg has changed the name of his social media empire to Meta Platforms (META) – Get Free Report, saying the metaverse, an immersive virtual world accelerated by the crypto industry, was the future of his company.
In fact, cryptocurrency prices were soaring to the point where the market reached a valuation of $3 trillion in early November 2021. Bitcoin soared to $69,044.77 and ether, the No. 2 digital currency, soared to $4,878.26.
This craze created crypto millionaires and billionaires.
Less than a year later, the bubble has burst. The crypto market has crashed: the market is valued at $996 billion, according to data firm CoinGecko. Bitcoin has lost 73% of its value compared with its all-time high, while ether is down 68% from its record.
The NFT market has also collapsed. Trading volumes on OpenSea, the Amazon (AMZN) – Get Free Report of NFTs, have plummeted, according to DappRadar.
Coinbase (COIN) – Get Free Report, the most popular cryptocurrency exchange platform in the U.S., has seen its stock-market value melt. Coinbase shares are down 75% since January. RobinHood (HOOD) – Get Free Report, the Gen Z brokerage, which also benefited from cryptomania, is down 46% since January.
Overall, the current picture is pessimistic for the crypto industry, which is going through what insiders call the crypto winter, a period of falling prices.
One executive who has top standing to speak on the subject is the billionaire entrepreneur Mark Cuban. And as TheStreet has reported in other contexts, he doesn't mince words. He thinks that the crypto space seems to have lost its luster and the excitement it used to bring.
"Crypto has a place for sure," the billionaire said at the 2022 annual Code Conference from Vox Media on Sept. 6, according to excerpts of the interview led by the journalist and host Kara Swisher. "[What's] missing is new applications."
Cuban has invested in varied projects, ranging from web 3, the new iteration of the internet, to blockchain companies to NFTs to the ether cryptocurrency, whose ethereum platform he supports. He has invested in Yuga Labs, which owns the famous NFTs Bored Ape Yacht Club collection.
Cuban is a noted ethereum maximalist, which means he favors the platform over other blockchains. Ethereum has smart contracts, which are computer code that determines the terms of a transaction (loans, trading, etc.) and doesn't rely on any third party.
"Just like in the early days of the internet, we sail with the Internet. It's all boring, right? Because we haven't seen anything new. And it really took for mobile to come along to really propel it going forward. And we don't have that right now for crypto, so it's kind of boring," the "Shark Tank" star told Swisher.
He added: "And it's just going to stay boring with [decentralized finance] and NFTs as collectibles and maybe some other little things coming along to interest."
Cuban will, however, continue to invest in the crypto industry, he said. "I'm still very interested and still investing but it's just early."
This is not the first time the entrepreneur has criticized the young crypto industry at a time when public interest in it is waning.
That easing of interest is understandable after a summer that saw a liquidity crisis plus prominent lenders like Voyager Digital, Celsius Network and hedge fund Three Arrows Capital file for Chapter 11 bankruptcy or be forced into liquidation.
"In stocks and crypto, you will see companies that were sustained by cheap, easy money — but didn’t have valid business prospects — will disappear,” Cuban warned last June. "Like [Warren] Buffett says, ‘When the tide goes out, you get to see who is swimming naked."
The billionaire has also been sued by individual investors who hold him responsible for the losses they say they suffered from bankrupt lender Voyager Digital. In October 2021 Cuban's NBA franchise, the Dallas Mavericks, had signed a five-year agreement with Voyager to promote cryptocurrencies
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