To billionaire investor Mark Cuban, bitcoin has a major edge over other cryptocurrencies.
In his opinion, that’s due to its algorithmic scarcity, which makes bitcoin limited in supply by design. Because of this, Cuban sees bitcoin as an asset that will appreciate as demand increases. He has previously compared it to gold, even saying that bitcoin is a better store of value than gold.
The “Shark Tank” investor and Dallas Mavericks owner is so bullish on bitcoin that he predicts that it, along with Ethereum, will be viewed as “safe havens” in crypto in the future, meaning that bitcoin will be seen as an asset that will keep its value or grow in value, even when the overall crypto market faces turbulence.
But despite Cuban’s comments, keep in mind that financial experts generally consider cryptocurrency risky, volatile and speculative, and warn that investors should only invest what they can afford to lose.
Cuban’s thread of tweets came after he debated the use cases of bitcoin and Ethereum, among other things, with bitcoin maximalists on Twitter. They agreed on a few things, but some of Cuban’s thoughts were met with pushback.
Bitcoin maximalists view the bitcoin blockchain as a decentralized, peer-to-peer financial system that has the potential to replace traditional financial systems. They view the cryptocurrency as both a medium of exchange and a hedge against inflation.
But Cuban said that, in his opinion, bitcoin is “not a cure for any financial system” and “it’s not a hedge to anything.” While Cuban sees bitcoin as a store of value that will appreciate, he doesn’t view it as a medium of exchange or as a currency that will be be used commonly for transactions, due to factors like taxes and fees.
That’s because “I can see an unlimited number of applications that will change the biz/consumer world forever,” Cuban said. “And to use them you need to buy Eth … BTC doesn’t have that demand pull.”
By this, Cuban is referring to the smart contracts, or collections of code, on the ethereum blockchain that power decentralized finance, or DeFi, applications and nonfungible tokens, or NFTs. To him, smart contracts “really changed everything” in the crypto space.
In fact, when asked what cryptocurrency he’d suggest for beginners or new investors in the space, Cuban previously told CNBC Make It that “as an investment, I think ethereum has the most upside.”
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”