- Mark Cuban revealed his stance on cryptocurrencies, including why he is convinced Bitcoin can’t be a currency.
- Cuban believes that Ethereum is a better store of value than Bitcoin.
Billionaire inventor and investor Mark Cuban believes that Bitcoin is too complex and too costly to become a widely used currency. In a recent podcast, he delved into why he has become a Bitcoin bull, how decentralized finance could rival the legacy banking system, his favorite cryptocurrency projects and why Ethereum is a better store of value than Bitcoin.
Cuban is most renowned for owning the NBA franchise Dallas Mavericks and being an investor on Shark Tank. He joined Camila Russo on her ‘The Defiant’ podcast to discuss his involvement in the cryptocurrency industry and what he believes the future holds. Never one to hold back, Cuban started off by criticizing Bitcoin as a currency.
Bitcoin skepticism and DeFi optimism
Cuban is a tech geek and this was why he started ‘playing around’ with Bitcoin in its early years. However, he didn’t buy into the narrative that Bitcoin would become a currency.
The argument on Bitcoin, in particular, was always that it was going to be a currency. Over the next five years, I was certainly a naysayer. To this day, I’m not a believer that Bitcoin will become a currency. Most Bitcoiners aren’t even saying it’s a currency anymore. I’ve listened to all the talk about Lightning over the years and how it would change everything, but it just hasn’t.
Cuban believes that Bitcoin is “too costly, too slow and too complex” to become a currency. Moreover, people now mostly view it as a store of value. They just want to see their BTC spike, a view which Cuban shares.
The billionaire, who is worth $4.3 billion and the 177th richest person, further attacked the narrative that Bitcoin is a hedge against fiat inflation. “I don’t think there is any correlation between what happens with the Federal Reserve and the price of Bitcoin,” he asserted.
While he admitted that there are some sovereign currencies that have collapsed, like in Argentina, he believes that the US dollar would never collapse. And even in such a case, Bitcoin would still not rise to replace the USD. This is because even then, BTC would still be valued in relation to the local fiat currency.
In an optimistic outlook, he foresees the Federal Reserve replacing some of its gold reserves with cryptocurrencies.
If countries think that Bitcoin has a perceived store of value that enough people believe in, I can see sovereign governments selling some of their gold to buy some percentage in Bitcoin, Ethereum, USDC and Tether.
Ethereum is a better store of value than Bitcoin
For most in the industry, Bitcoin is the default store of value. However, for the eccentric billionaire, Ethereum is a better store of value as it has more actual utility.
Ethereum right now has an advantage over Bitcoin in terms of regular people, not just as a store of value but also transactional. As more people get into NFTs (non-fungible tokens) all they are going to know is Ethereum. And they’re all going to buy Ethereum to get into it.
Ethereum’s strength lies in its utility, something Bitcoin doesn’t have. People are building real-world use cases on Ethereum. The biggest use case is in DeFi, a sector that has been growing aggressively. Tokenizing traditional assets and selling them via digital tokens is also becoming a prominent use case.
There’s nothing in this ecosystem that says you have to buy Bitcoin first in order to transact or do something within DeFi or within the digital goods marketplace.
Cuban prides himself in identifying niches that are going to explode and getting in early. He was one of the people behind Broadcast.com, the pioneer in online live-streaming which he sold to Yahoo! for $5.7 billion. He told Russo that he has identified DeFi as the niche in cryptocurrencies that’s going to blow up.
DeFi is availing credit facilities to ordinary users in seconds. Many of these users wouldn’t have obtained such credit in the banking system. This makes DeFi a viable rival for the banks, especially with Gen Z. He revealed that he has tried out staking with Aave as well as buying NFTs on Rarible.