Home Ethereum Ethereum merger could be a ‘sell the news’ event, says Mark Cuban

Ethereum merger could be a ‘sell the news’ event, says Mark Cuban

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Ethereum merger could be a ‘sell the news’ event, says Mark Cuban

US billionaire investor and owner of the Dallas Mavericks – Mark Cuban – believes that Ethereum’s transition from a proof-of-work consensus mechanism to a proof-of-stake could be a double-edged sword. In his view, investor excitement surrounding the move could overtake the actual use cases of “the merger” and create a “sell the news” event.

Cuban also argued that enforcing regulations in the crypto space is a vital step that global regulators must enforce. Investors are looking for maximum protection, and if granted, many will enter the digital asset ecosystem and drive the industry forward.

Cuban Thoughts on Fusion

The second largest cryptocurrency protocol – Ethereum – is expected to transition from PoW to PoS later this year. This long-awaited decision is among the most discussed topics in the crypto industry. Known as the “Merge“, the process should make Ethereum less harmful to the environment while providing additional security to its network and faster transaction speeds.

As such, many investors have held out hope that the native token – Ether (ETH) – will rise, sparking excitement across the industry. Mark Cuban is also optimistic about this transition. Earlier this year he said that it could significantly reduce Ethereum’s energy consumption, while Ether could turn into a deflationary asset.

In a recent interview, however, he warned that the process could create a “buy the rumour, sell the news” event. In such cases, asset prices rise significantly before a highly anticipated move, but fail to continue the uptrend and even crash once it is over.

The price expansion of Dogecoin last year could be seen as a case in point. When DOGE reached $0.70 in May 2021, many people thought that its valuation could reach $1. Additionally, Elon Musk, arguably DOGE’s most notable supporter, was invited as a guest on comedy show Saturday Night Live. There, he was supposed to present the merits of the coin to millions of people, which could potentially increase the price of the token.

However, the CEO of Tesla did not do what the Dogecoin army expected. Instead, he just joked with the show’s host. In the following hours, DOGE crushed significantly, and since then it has never peaked again. Currently, it is trading at $0.07, which is a 90% drop from its all-time high.

Regulations, the SEC and the Metaverse

Addressing other topics, such as the imposition of regulations in the crypto industry, Cuban said he was supportive. Like any technological innovation, the sector must guarantee investors maximum security so that they feel safe and enter it en masse. He also felt that there is a great similarity between the current status of crypto and the internet in its early years:

“There’s the security aspect, and you see what’s happening every day: there’s a hack somewhere. It’s no different from the early days of the internet. There was a time when people said: “Don’t use Amazon because your credit card will be attacked, don’t shop online because you’re putting your credit card at risk.” So that’s part of the learning curve.

Nevertheless, the American doubted that the United States Securities and Exchange Commission (SEC) could implement appropriate rules in the sector. He called the agency “incredibly hypocritical” because it seeks to halt the development of the crypto market, but at the same time, it does not focus on thousands of dodgy financial products, including “leaf stocks”. roses”.

Cuban spoke about the Metaverse and its growing popularity. For him, buying real estate in virtual reality is the “stupidest” thing a person can do because there is an unlimited amount of land that people could create and sell to inexperienced investors.

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