Crypto market hadn’t brought good news for bitcoin enthusiasts and investors as the price of bitcoin dropped below $8,000. Apart from the current bear market, the volatility and essence of the crypto asset class got critiqued by an American businessman and investor, Mark Cuban.
While sharing his thoughts on a YouTube video, billionaire technology investor and owner of the National Basketball Association’s Dallas Mavericks, Cuban thrashed bitcoin by openly criticizing the world’s first truly decentralized cryptocurrency, bitcoin. He straightforwardly said that he would prefer to own bananas instead of bitcoin. He said:
I’d rather have bananas, I can eat bananas. Crypto… Not so much.”
Co-owner of 2929 Entertainment and chairman of AXS TV, Cuban is also a shark investor on the ABC reality television series, Shark Tank. Through the video, Cuban answered a Twitter user enquiring reasons from Cuban for hating cryptocurrencies.
In his response, Cuban explained his take on cryptos and elaborated several reasons for his hatred against cryptocurrencies such as bitcoin. According to him, cryptocurrencies didn’t possess any intrinsic value. He rejected bitcoin by stating that its price was determined by its demand in the market. According to him, bitcoin was worth what somebody would pay for it, something he disapproved completely.
For justifying his claims that bitcoin lacked intrinsic value, he described an example encompassing comic books and baseball cards. In this regard, his exact words were:
Did you ever see someone who collected baseball cards? And they were really, really, really proud of their baseball cards because they kept saying they were going to go up in price? Comic books — same thing, even artwork. There’s no real intrinsic value, you can’t eat a baseball card […] Your artwork might look good on the wall but not much you can do with it. Bitcoin — there’s even less you can do with it: at least I can look at my baseball card […] I can look at artwork
After introduced to the world over a decade ago, bitcoin disrupted the financial system of the world. By displaying extremely decentralized nature, bitcoin waged a war against the centralized fiat. As money such as fiat is printed by financial institutes like banks, fiat can be controlled and influenced by authorities. However, bitcoin with an infinite supply is neither under the control of any authority nor subject to any kind of inflation.
As bitcoin’s price depends on the fundamentals of supply and demand only, it can’t be controlled. That’s why bitcoin experiences extreme volatility, skyrocketing one day and hovering over the ground on another. But as the world’s largest cryptocurrency by market cap is completely decentralized, its price is bound to depend on fundamentals.
As bitcoin’s essence lies in its price depending on supply and demand, Cuban’s reason for not liking cryptos as their prices depend on the market’s demand doesn’t feel sound and sensible. If price of bitcoin was dependent on any other factor then fundamentals, the fate of bitcoin would have been similar to fiat.
Bitcoin is programmed digital currency with fixed supply and circulating rates. After almost every 10 minutes, upon completion of a block into bitcoin blockchain, 12.5 bitcoins are created. After bitcoin halving next year, 6.25 bitcoins will be created after every 10 mins. In total, there will be only 20 million bitcoins in the world. This unique attribute of bitcoin makes it superior to other currencies such as fiat because, with limited supply, bitcoin is capable of tackling devaluation via inflation.
Later in the video, Cuban continued his thoughts and compared bitcoin with gold. He stated that people didn’t perceive gold correctly either. He was of the view that people falsely believed that holding onto gold will be helpful for them under bad circumstances.
Correcting the belief, he added that gold could be stolen by someone. Extending his thoughts to cryptocurrencies, he continued the same sentiment and concluded that cryptos won’t be helpful either under situations such as ‘ bad depression’.
Although cryptocurrencies are virtual digital assets, they make up a billion-dollar market cap. Previously, crypto adversaries such as the Bank of England changed their stance for bitcoin. Let’s see if Cuban also becomes a crypto enthusiast in the future.