The billionaire investor left the bananas behind a long time ago.
- Mark Cuban is an avid cryptocurrency enthusiast who likens crypto to the early days of the internet.
- He stresses the importance of doing your research before investing.
- Understanding the potential of smart contracts has been a pivotal moment for the shark tank judge.
Mark Cuban’s views on crypto have come a long way since 2019, when he said he’d rather have bananas than Bitcoin (BTC). These days, if he don’t put money in shark tank projects, about 80% of new Cuban investments go into crypto or crypto-related projects. The outspoken crypto enthusiast devotes much of his time and money to digital assets.
Cuban is a fan of Bitcoin, Ethereum (ETH), and a handful of other cryptocurrencies. Last April, he said that around 60% of his crypto portfolio was in Bitcoin, but a year is a long time in crypto and the balance may have shifted since then.
Here are some key crypto lessons we can learn from Cuba:
1. Do your research
Last June, Cuban was one of many investors who lost money due to the collapse of the Titan DeFi token. Titan’s price went from over $60 to almost nothing overnight. Titan developers say it wasn’t a coin toss – a type of scam where people increase the value of a crypto and then abruptly withdraw all the money. Nevertheless, Cuban lost $200,000 and said The New York Times“I should have done more homework on that.”
There are over 18,000 cryptocurrencies, according to CoinMarketCap. Many are legitimate projects, but some will turn out to be scams or poorly thought out or poorly run businesses. Solid research is the best way to weed out pretenders. See who is behind the crypto, what problem they want to solve, and how the tokens or coins will be issued. Or, as Cuban told CNBC, “Always look for utility. That’s where value is created.”
2. Bitcoin is not an inflation hedge
Cuban views Bitcoin as a type of digital gold, a store of value that should retain its value over time. But unlike some, he doesn’t think either is a good hedge against inflation. In January, he tweeted: “Gold is not an inflation hedge. It’s just a marketing slogan like BTC is.”
The billionaire has never been blind to Bitcoin’s flaws. He said The Delphi Podcast last year that bitcoin will never work as a currency. “It’s too hard. It’s too slow. There’s a limit to the number of transactions,” he said.
However, as an alternative to gold? This is where Cuba thinks it shines. “All along I said there was a store of value where if you could get people to believe it was a better alternative to gold then – due to algorithmic scarcity – the price would increase.”
3. Smart contracts are a game changer
Understanding smart contracts has been Cuba’s defining moment in terms of cryptocurrency. Smart contracts are tiny pieces of self-executing code that live on the blockchain. They are the ones that make it possible to build applications and automatically set up different types of agreements. They currently power much of the decentralized finance industry and are also used to create non-fungible tokens (NFTs).
For Cuban, this is only the beginning. He says smart contracts have many business applications that people haven’t even considered yet. Moreover, Cuba sees huge potential in the fact that smart contracts enable decentralized decision-making. Rather than having a board or CEO setting the direction of an organization, what is emerging are decentralized autonomous organizations (DAOs). the shark tank the judge recently said The problem with Jon Stewart podcast that this is where he focuses much of his attention.
4. Cryptocurrency is like the early days of the internet
One of the reasons Cuba is excited about crypto is that he thinks it’s similar to the early 1990s when the internet was just beginning to take off. “Now it’s America 2.0. It’s Money 2.0.” He said in the RealVision interview. “And I’m not talking about currency money, I mean being able to make money digitally has changed everything.”
This comparison shows the huge potential of the cryptocurrency industry, but it also highlights the dangers. Some companies like Amazon and eBay became household names, but many of those early internet ventures didn’t survive in the long run. The challenge for crypto investors is choosing which ones are most likely to last.
Should you invest in Bitcoin?
Each person’s financial situation is different. Cuban has great advice on crypto investing, but he’s also a billionaire with his own financial goals and sense of risk. If you are considering buying Bitcoin, first make sure your financial foundations are covered. This means, for example, being in addition to your pension contributions and having an emergency fund that can cover three to six months of living expenses.
It’s clear that Cuban spent a lot of time understanding crypto and its potential – and even lost money in at least one dodgy project. Take a leaf from his book and try to learn more about smart contracts, DAOs and their usefulness. The more research you do, the more you will know about the industry and the better investment decisions you can make.
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