Mark Cuban shares his New Round of Opinions on Cryptocurrencies and BitcoinJanuary 19, 2021
It is not a secret that the billionaire Mark Cuban is not precisely a fan of cryptocurrencies. In the past, he has been very critical of the concept of digital currencies, especially bitcoin and its BTC token. Now, however, with the start of 2021, both the world and bitcoin are vastly different places. Today, the price of a bitcoin token is well beyond 35,000 USD and there is a sense that the record could be broken again in a matter of weeks, if not days.
In that environment, even the harshest critics of crypto usually change their tune and take on a slightly different approach to denying the relevance of bitcoin and blockchain currency in general. In the case of Cuban, the same thing applies but does so in somewhat of a different manner than the simple story about how bitcoin is not a currency, just an asset. Here is the take of the billionaire investor on the crypto market of the present day and age, as well the trajectory it and its associated technology might take in the near future.
In recent months, bitcoin managed to drastically rise in price and market capitalization. It smashed through its 2017 records and more than doubled its value in terms of price. With a record of 42,000 USD for one BTC, it captured the attention of the entire world, not just the financial sector. That is something otherwise akin to a once-per-generation success for any kind of business venture.
In the case of the bitcoin cryptocurrency network, many analysts believe that this is just the start of the same successful streak. If that is true and projections seeing BTC reach sums in hundreds of thousands of USD, then the coming period will be a lot wilder than the current bull run. Because of that even the harshest critics of bitcoin clearly feel the need to get their opinion out there. Mark Cuban is definitely among those individuals.
Bananas over Bitcoin
Not long ago, Mark Cuban, who is the billionaire investor, famously stated that he would rather have bananas than any bitcoin. He explained this idea by stating that at least bananas have some kind of intrinsic value to them. Bitcoin, on the other hand, in the mind of Mark Cuban at that point in time did not have any value at all, apart from its ongoing speculative price assessment. While he did not precisely make a U-turn on his stance on bitcoin he did single out a field he believes to be incredibly important for the future financial sector.
That domain is the emerging decentralized finance or DeFi space and marketplace that could be an even bigger game-changer than blockchain technology initially was. Cuban stated that it is true that BTC managed to impress institutional investors on a global scale. By this, he is referring to the fact that a lot of major companies like MicroStrategy decided to invest billions of USD into crypto more precisely bitcoin. But, for Cuban, the main interest point of any investor should still be the DeFi domain.
Debt and Inflation
The billionaire also expanded his assessment of the current state of the cryptocurrency network market to the issue of the US debt and the potential for a rise in inflation. He said the coronavirus stimulus package worth 1.9 trillion USD, which is widely expected from the soon-to-be US President Joe Biden, will not drastically move the price of crypto. He believes the same about the ongoing bond-buying process that the Federal Reserve in the US is currently engaged in.
Instead, Cuban is connecting that narrative to the problem of rising interest rates. if these remain relatively stable in the coming period, the price of different assets will remain generally the same. That includes BTC and other digital currencies because the recent past really showed these often if not from now on they always get synchronized with the mainstream market movement.
A large part of Mark Cuban the background comes from being an investor in the technology-based industries and mainly startups. Even when it comes to arguably fringe tech ideas, like esports betting platforms, Cuban was generally interested. This is likely why he continues to perceive the bitcoin cryptocurrency network and other alternative digital coins as a manifestation of potential interesting technology.
He said that decentralized finance holds the key to the future development of this domain including BTC itself. Through this tech, uses of digital currencies can have traditional financial instruments including insurance and loans, all while completely separate from the traditional banking sector. The potential here is clear even though the actual user numbers are still nowhere near those that regular cryptocurrency networks have. Yet, while the technological potential clearly is there, DeFi still has a long way to go according to Cuban.
Not Being Right, not Being Wrong
Throughout all of the opinions, Mark Cuban presented when it comes to the current state of the cryptocurrency market, there is a strong sense that he simply does not want to be wrong again. However, there is also a similar sense that he does not want to simply say he was wrong about bitcoin in the first place. Instead, the entire narrative once again revolves around the issue of technology over its actual application. Like numerous bitcoin critics over the years, the argument once again moves to space where the technology that is used is hailed as groundbreaking, but the working application not so much.
Similarly, a few years ago, traditional market analysts were ready to say that blockchain technology is important, but they would immediately reject any possibility that bitcoin, direct and practical use of the same tech, is anywhere near that relevant. Yet, years later, the ability to deny the crypto market as a relevant financial force in the interconnected world practically nullified the recent bull run. Because of that Mark Cuban decided to elegantly shift the focus from saying that bitcoin sometimes is a better option than getting bananas, and instead focus on the undeniable potential of DeFi.