Mark Cuban: Bitcoin Is More Valuable Than Gold

Mark Cuban, the billionaire entrepreneur and owner of the Dallas Mavericks, recently stated in an interview that he would rather own Bitcoin than gold in the event of an economic downturn, as he believes it has “more value.”

Cuban, who is known for his appearances on ABC's Shark Tank and his ownership of 2929 Entertainment, has been following Bitcoin since at least 2017, when he expressed skepticism towards the cryptocurrency. However, his stance gradually shifted over the years, and by 2022, he was advising people to invest in Bitcoin during the bear market, when the price of BTC fell below $16,000.

In the past, Cuban has likened cryptocurrencies to the dot-com bubble of the early 2000s and has fallen victim to two separate hacking incidents involving cryptocurrencies, both of which resulted in thefts.

During the 2024 NBA season, Cuban's interest in Bitcoin became increasingly evident, culminating in the interview where he stated that he would choose Bitcoin over gold as a hedge against economic troubles.

According to Cuban, the value of gold is largely derived from its status in financial markets as a safe haven asset during periods of economic crisis or downturn, despite the fact that jewelry demand and supply has little impact on its price. He believes that many people who own Bitcoin view it in a similar light, as a store of value.

In the event of a severe economic crisis, Cuban suggests that Bitcoin could have an advantage over gold due to being perceived as a superior asset.

While gold tends to maintain its purchasing power over the long term, unlike fiat currencies such as the dollar, its use as a medium of exchange is limited. It is rarely used for this purpose today, and even in the past, other metals like silver were used more frequently because gold coins were too valuable and scarce.

Gold is also relatively easy to steal and impractical for everyday use. Its presence in financial markets is purely financial, and even then, it is mostly used through financial derivatives like ETFs.

On the one hand, this makes gold advantageous as a risk-off asset, but on the other hand, it inevitably limits its potential for return.

In contrast, Bitcoin is designed to be simple and quick to use. It can be used by anyone and cannot be counterfeited, Cuban points out.

In addition to serving as a store of value, Bitcoin's ease of use and divisibility also makes it a currency of exchange that can be transferred both domestically and internationally.

For these technical advantages, Cuban believes that Bitcoin has “more value” than gold.

While it's true that the number of people using Bitcoin as a payment method globally is negligible, its transferability is what matters here, especially to and from exchanges.

Additionally, being a risk-on asset differentiates Bitcoin from gold, potentially ensuring higher returns at least in theory.

Ultimately, however, Bitcoin is not an alternative to gold but a separate asset with overlapping purposes. From a purely technical perspective, though, the advantages are evident.