Mark Cuban Bares Mind On Crypto

• Mark Cuban thinks that younger investors will be the generation that is least affected by the volatility in the markets.
• He likens the cryptocurrency markets to the early days of the dotcom boom.
• He urges investors to learn how to distinguish facts from noise in order to get the most out of their investments.

Bitcoin’s leading proponent, Mark Cuban has revealed his pattern of investing in the cryptocurrency markets as being focused on utility. The serial investor noted that there is a lot of similarity between cryptocurrencies and the dot-com boom.

Mark Cuban’s Utility Based Strategy

In an interview with Fox Business, Mark Cuban revealed that for investors to succeed in the volatile cryptocurrency markets, they have to keep an eye on the utility of their assets. The 63-year-old billionaire noted that Bitcoin and Ethereum each had their own utilities being “an alternative to gold” and “smart contracts that allow you to build all kinds of different applications”.

“You have to look at investing at crypto the same way you look at investing in anything. Do you think there is a value proposition that consumers or businesses are going to use?” he said. “If you think it provides enough growth, then you invest. If the answer is no, then you don’t.”

Cuban noted that the key challenge with cryptocurrencies is the problem of “separating the signal from the noise.” He stated that this problem bears similarities to the early internet stocks that saw investors pour in money into companies despite having only a website to their name. He thinks that nothing has changed from the mid-’90s and the thing he looks out for the most before investing is the utility that a cryptocurrency provides.

In the course of the interview, Cuban noted that the tailspin in the markets will not come as a shock to young investors because they are “crypto-natives” that are used to “a lot of speculative run-ups and run downs”. He goes on to claim that they will be the least spooked of all generations as assets bear the brunt of macroeconomic factors.

Cryptocurrency Markets Are Maturing

During the course of the interview with Fox Business, Mark Cuban said that the cryptocurrency markets are becoming “more mature” and this maturity brings in traditional investors. He noted that the introduction of ETFs, VCs, institutional investors, and private equity underscores the influx of traditional investors to the space.

“Everything that we are saying now about cryptocurrencies and applications, we said exactly the same thing about the internet stocks in the 90s.”

The SEC approved the first Bitcoin ETF in October to critical acclaim after nearly 8 years of applications from firms. While the SEC is yet to approve a spot Bitcoin ETF, Congressmen and the wider markets have written to the regulator urging the immediate approval of one of the applications that are its desks.