Mark Cuban Calls Crypto Crash the ‘Great Unwind’ as Bitcoin and Others Keep Falling
Bitcoin and other cryptocurrencies continued their crash Monday, a day after billionaire entrepreneur Mark Cuban said crypto is going through a “great unwind.”
The prices of several cryptocurrencies, including Bitcoin, saw further declines amid news that a pair of top crypto mining operations in China suspended operations, The Independent reported. Those suspensions followed an earlier announcement that China is cracking down on the use and trading of virtual currencies within the country. The country accounts for nearly 70 percent of the world’s cryptocurrency mining.
Monday’s news continued a string of recent negative events that have sent the price of cryptocurrency plummeting. As Newsweek reported on Sunday, Bitcoin’s price has fallen below $33,000 from more than $46,000 a week earlier. Dogecoin dipped from above $0.50 on May 16 to less than $0.30, while Ethereum fell from more than $3,500 last week to about $2,000 today.
Cuban’s response grabbed headlines over the weekend when the Dallas Mavericks owner and “Shark Tank” star tweeted: “I think this is the ‘Great Unwind’. Traders borrow to buy Eth, used eth to borrow alt/stable coin, used that to LP a high APY Pair, took the SLPs and staked them to maxout yield. The minute Eth drops to their Tragic Number, they had to Unwind. Unstake, Remove Liquidity, Repay.”
In a later tweet Cuban said, “It gets worse when a Double Tragic Number strikes those who have been in long enough to not think they would ever get hit. When they get hit that means most of the dry powder that was being used to hold support levels is unwound too.”
Meanwhile, Forbes reported Monday that a leaked report from Goldman Sachs gave Ethereum a “high chance” of overtaking Bitcoin as a dominant store of value, and called it the “Amazon of information.” Growth in the price of Ethereum has far outpaced that of Bitcoin over the last year, Forbes noted, with Ethereum adding around 1,000% compared to Bitcoin’s 300%, even after last week’s crash.
For those who have put money into cryptocurrencies, many advisors warn against panicking — the same way stock market advisors warn against panicking during Wall Street corrections. As Forbes reported last week, crypto prices have still shown gains over the long term.
Meltem Demirors, chief strategy officer at CoinShares, suggests that the current correction in crypto is both healthy and normal and said she remains “bullish.”
Luke Lloyd, an investment strategist at Strategic Wealth Partners, offered a similar take, telling Forbes that corrections like this are to be expected in crypto markets because they are speculative assets based on supply and demand. Crypto prices have been on such a long and steep climb, he said, it’s natural that many people would take profits by cashing out.
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