Mark Cuban seems to have been a crypto fan for some time. Recently, he praised both bitcoin and Ethereum and claims to hold a substantial amount of both. However, one of the more recent coins to receive backing by the billionaire investor has tanked big time, and as a result, Cuban is stepping in and calling for clearer regulation regarding stable currencies.
Mark Cuban Has Taken a Crypto Hit
At press time, it is unknown which stable currency garnered Cuban’s attention, though it is likely he lost quite a bit of money on the project given his calls for regulators to enter the fray. The asset is known to have been a new decentralized digital currency and is believed to have crashed to zero and lost 100 percent of its value.
Stable coins are growing in popularity amongst both banks and investors alike given that they are designed to alleviate some of the volatility that comes with bitcoin and other standard cryptocurrencies. These assets tend to go up and down faster than the sun in the morning and the moon at night. Bitcoin, for example, was trading at a new all-time high of approximately $64,000 in mid-April, though about a month later, the currency had lost nearly half its value.
Stable currencies, by contrast, are tied to fiat currencies such as the U.S. dollar, the euro, and the yen. They are designed to give crypto investors a little more stability in their portfolios and prevent them from dealing with massive or heavy losses. However, questions are being raised given this new project was an alleged stable currency. If it were, indeed, designed to be “stable,” how could it tank so hard?
In a recent interview, Cuban voiced his unhappiness about his present circumstances and called for lawmakers to step into the mix so that stable coins can be clearly defined in the future. He said:
There should be regulation to define what a stable coin is and what collateralization is acceptable.
Discussing how much he lost, he did not reveal the exact number, though he did mention the following:
As a percentage of my crypto portfolio, it was small… but it was enough that I was not happy about it. I got hit like everyone else.
Not All Coins Are Created Equal
Paolo Ardoino – the chief technology officer of Tether, one of the biggest and most popular stable currencies available – explained in a statement the risks behind emerging stable currency projects:
It is important to note the pivotal role of stable coins that are pegged to fiat currency in this emerging ecosystem… All tokens are not created equal. In some project, there is a risk that everything goes to zero. We urge those investing in the ecosystem to educate themselves in these new financial projects. Never invest what you are not prepared to lose.