Mark Cuban — an early skeptic of cryptocurrencies — says most bitcoin investors have “no idea what they are buying.”
The billionaire tech entrepreneur, “Shark,” and Dallas Mavericks owner is not among them: Cuban has made his second cryptocurrency investment in three months.
No contradiction there, he says.
“I’ve always been a supporter of blockchain,” Cuban said Tuesday in an interview with LinkedIn. “What I have questioned is the price of bitcoin, not the value of the technology.”
Cuban’s latest bet is on 1confirmation, a fund that plans to raise $20 million to back blockchain-based companies. It’s a vote of confidence in Nick Tomaino — one of the first employees at digital currency exchange Coinbase Inc. and now a principal at Runa Capital, which is among 1confirmation’s backers.
“Nick is smart,” and he “does his homework and is looking for great applications,” Cuban told LinkedIn. “There will be an Amazon- or Google-level impact application. Hopefully we can find them.”
Cuban dipped his toe into cryptocurrencies only last June with an investment in Unikrn, which allows users to bet for free using virtual tokens known as “Unikoins.” At the time he pronounced bitcoin “a bubble,” when it was trading at about $3,000, tripling its value for the year. Last week it traded at record highs over $4,500 last week before settling in under $4,000 on Tuesday.
On June 6, 2017, Cuban tweeted:
I decided to go back to the source to find out what has changed — or not.
The following are edited excerpts from my Q&A with Cuban:
Walden Siew: Have you changed your position on the potential of bitcoin and blockchain? What is your current view?
Mark Cuban: “Nope. As I said I pushed Unikrn to adopt blockchain and have pushed hard for my other investments to find applications for blockchain. There will be break-out applications, but that is completely different from the day-to-day price of bitcoin or other currencies.”
WS: Why do you think 1confirmation has a winning business model?
MC: Nick [Tomaino] understands the value of the technology and implementations.
WS: Do you still believe bitcoin is a bubble waiting to burst?
MC: As I have said, I think the price will go up and down in big swings. It’s a matter of supply and demand for any given cryptocurrency. If there are more sellers than buyers, we could see a big swing down.
What concerns me about the price is that there are a lot of buyers who have no idea what they are buying. They are buying it because their friends are making money from it. That’s typically emblematic of a bubble.
What do you think? Is Mark Cuban making a good investment in cryptocurrencies? And is bitcoin still a bubble waiting to bust? Weigh in with a comment or an article using #CubanBitcoin.