Mark Cuban on Bitcoin

When you think of billionaires who have made a name for themselves in the world of business and entertainment, Mark Cuban comes straight to mind.  So what does Mark Cuban think about bitcoin?

As the charismatic owner of the Dallas Mavericks, a “shark” investor on the hit TV show “Shark Tank,” and a successful entrepreneur with a string of lucrative ventures under his belt, Cuban has proven time and time again that he’s got an eye for opportunity. 

Born in Pittsburgh in 1958, he has built a fortune by spotting trends and capitalizing on them, so it’s no wonder that Bitcoin has piqued his interest.

As someone known for his candid and often controversial opinions, Cuban’s stance on Bitcoin has evolved over time. Despite early skepticism, Cuban has become more open to the potential of Bitcoin and even invested in Bitcoin-related ventures. 

Unfortunately, his ideas are scattered, non-specific, and centered around “crypto” rather than bitcoin. His lack of focus on bitcoin and distraction by generic things like blockchain and crypto shows that he hasn’t done the homework. It’s just another example of the appeal to authority fallacy. Just because Cuban knows a lot about tech companies and is a successful investor, doesn’t mean he’s done his bitcoin homework.

Not only are Mark Cuban’s criticisms of bitcoin either unsubstantiated or disproven, even his supportive statements about bitcoin are rather thin. Frankly, he’s just not an expert and I wish people would stop asking his opinion about it.

What Does Mark Cuban Think About Bitcoin?

In the early days of Bitcoin’s ascent, Mark Cuban wasn’t entirely sold on the potential of Bitcoin. With his keen eye for spotting trends and evaluating investments, Cuban expressed some reservations about Bitcoin’s rapidly increasing popularity.

In a 2017 (now deleted) tweet, he openly compared Bitcoin to a bubble, saying, 

“It’s just a bubble. I’m just not sure when or how much it will be corrected. When everyone is bragging about how easy it is to make money, I leave.”

At the time, Cuban’s cautious skepticism mirrored the concerns of many others who were skeptical of Bitcoin’s long-term viability and value. We can’t blame him for that, considering many of bitcoin’s biggest proponents in 2023 were once skeptical, or even outright critics.

By 2020, Mark Cuban appeared to have warmed up to the idea of Bitcoin, though he still expressed some reluctance to fully endorse it.

When interviewed by Forbes’ trading correspondent Benjamin Pirus, Cuban remarked:

“My thoughts haven’t changed.”

But it seemed that they had changed. Cuban at least acknowledged the value of Bitcoin as a store of wealth, stating: 

“It’s a store of value like gold that is more religion than solution to any problem.”

Is It A Bubble or A Store of Value – Which is it MARK?

And this is a great example of Cuban’s waffling between being pro and anti bitcoin, without ever committing to any specific idea. How can you at the same time say that bitcoin is a bubble, but it’s also a store of value like gold? How can you call it a religion that doesn’t solve a problem, when the problem it solves is how to store value in a era when money is constantly debased?

During the interview, Cuban boldly implied that Bitcoin would not replace fiat-based, government-backed currency:

“No matter how much BTC fans want to pretend that it’s a hedge against doomsday scenarios, it is not.”

This is what’s known as a straw man argument, where you defeat an easy idea to make your real idea sound more logical, even though what you’re actually saying isn’t so easy to prove. For example, I agree bitcoin would be useless in a nuclear apocalypse, but that doesn’t mean it’s not useful as a hedge against inflation, or useful in bank run scenarios.

Honestly, in a “doomsday” scenario credit cards and paper cash would be useless too. I mean, without the internet, we’d all be screwed. Bullets would probably be the most useful commodity and medium of exchange in a so-called doomsday scenario.

In the same year, Cuban demonstrated the same level of skepticism of Bitcoin while participating in a Q&A session with WIRED. 

Straw Man Arguments And Non Sequiturs

Cuban remarked that Bitcoin “is a key that is so complicated for 99% of the population. Do you print it out? How do you keep from being hacked? Who’s gonna host it for you? It’s just so difficult that it’s only worth what someone will pay for it.”

Again — straw man. Yes, bitcoin complicated. So are apps. Do you think 99% of the population can code their own apps? Or fix their own car? Or hook up their own internet? Or grow their own food? Simply being complicated isn’t an underlying reason why bitcoin doesn’t work. Even so, any technologist should agree that as complicated aspects get pushed into the background and simple UX emerges, adoption will increase.

In the video session with WIRED, whilst discussing the value of gold during an economic depression, Cuban famously remarked that he would “rather have bananas [than Bitcoin], I can eat bananas”  and Bitcoin, “not so much.”

By the time 2021 rolled around, Cuban had changed his tune on Bitcoin significantly. When appearing as a guest on the Club Random podcast, Cuban debated with host Bill Maher about Bitcoin vs’ Gold and stated: 

“If you have gold, you’re as dumb as f***.”

Maher replied in retort:

“[Gold] never goes away,” and “[is] like a hedge against everything else.”

Cuban replied: 

“No, but it’s not a hedge against anything, right? What it is, is the stored value, and you don’t own the physical gold, do you? Gold is a stored value and so is Bitcoin.”

“It’s a digital transaction and it’s a stored value. So, people perceive that there is value associated with gold, that there’s value associated with Bitcoin.”

Though he seems to acknowledge that bitcoin is a store of value, he still fails to demonstrate an understand of why bitcoin has value in the first place.

Fast forward to 2023, and in an interview with TheStreet, Cuban highlighted wash trading as the next major threat to the Bitcoin market. He warned: 

“I think the next possible implosion is the discovery and removal of wash trades on central exchanges.” 

According to binance.com, Mark Cuban expects wash trading to be on the rise during 2023, stating that no one is immune to Bitcoin scandals and fraud.

But now, for a third time, I’m genuinely confused as to what point he’s trying to make here. How exactly does wash trading affect the fundamental value prop of bitcoin? If exchanges are faking trading activity, that doesn’t change bitcoin’s monetary properties. If wash trading is exposed and banned, it doesn’t change bitcoin’s code.

Bubbles, Bananas, & Blow Ups

Cuban’s journey with Bitcoin, from his initial skepticism to his eventual half-hearted endorsement, reflects an evolving attitude shaped by research and shifting public opinions.

Bitcoin Bubble

Mark Cuban famously described Bitcoin as a bubble that would eventually burst during its early days of popularity. This was a common sentiment among skeptics at the time, as many people questioned the long-term viability and value of Bitcoin.

But has this prediction come true?

While Bitcoin has experienced significant price fluctuations and even sharp declines over the years, its value has continued to rise.

The dramatic price drops are frequently cited as evidence of a bubble, but supporters argue that these fluctuations are a natural part of the market’s maturation process.

It is critical to remember that Bitcoin, like any other investment, carries risks and is subject to market forces – and that no currency is immune to the effects of significant global events like a pandemic, sanctions, and interest rate changes.

Furthermore, Bitcoin has shown remarkable resilience over the years, and its growing acceptance by mainstream institutions and investors indicates a promising future. So, while Cuban’s early prediction of a Bitcoin bubble was based on legitimate concerns, Bitcoin’s track record suggests that it isn’t quite as fragile as he once thought.

Market Apocalypse

Early on in his foray into Bitcoin, Cuban remarked that Bitcoin was not a hedge against a doomsday scenario in the global market. 

While bitcoin probably wouldn’t be useful in an all-out nuclear apocalypse, there are several catastrophic financial scenarios in which bitcoin has proven to be extremely useful.

For one, let’s look back at the 50% over night drop in price when pandemic restrictions started to take effect in March 2020. The price dropped from $8k down to about $4k in a matter of hours, but then quickly recovered and three years later we now sit at $30,000 USD per coin. In terms of surviving a once-in-a-century event, bitcoin emerged successful. In my opinion, this solidified bitcoin’s use case as a store of value, even in global catastrophe.

More recently, let’s we can look at the failure of SVB and other banks around the US. This highlights bitcoin’s unique use case as a money without counterparty risk. Even top tech CEOs were seemingly surprised that their assets held at SVB were only insured up to $250k, and stood to lose nearly all of their billions of dollars of deposits thanks to bad bank investments.

The money wasn’t there. The money was never there thanks to fractional reserve. That’s how banks work. Bitcoin is different, because it it’s created by debt, and it doesn’t rely on a third party to hold it for you. When you hold your own keys, nobody can move, lend, or lock up your bitcoin.

So in the past decade, not only has bitcoin survived crypto-specific catastrophes such as the Mt. Gox hack and FTX implosion, it’s also survived cataclysmic events in both US and global markets.

Bitcoin Is Too Complicated

In his session with WIRED, Cuban stated that he thought Bitcoin was too difficult for the average person to use. 

While the underlying technology and concepts can be complex, the actual process of using Bitcoin has become more user-friendly over time, making it more accessible to a wider audience. There are numerous platforms and applications designed to make buying, selling, and storing Bitcoin easier. A hardware wallet costs $100. A mobile app for self custody is free. Multisig is possible with a $40 plastic card and a DIY raspberry pi. You can trade p2p bitcoin directly from your browser.

Individuals without extensive technical knowledge can now participate in the Bitcoin market with relative ease thanks to these user-friendly tools, and who knows what the next ten years will bring. Compare using dial up in the 1990’s vs navigating a smartphone today, and imagine what that could mean for the next two decades of bitcoin.

Cuban is correct that there is a learning curve involved in using Bitcoin. To use Bitcoin effectively and securely, users must first understand how it works, the significance of private keys, and the risks associated with Bitcoin.

This is a time-consuming process, but it is not insurmountable for the average person – if you can use a computer and see the value in investing into stocks, you can definitely grasp the theory and application behind Bitcoin.

Furthermore, as Bitcoin gains mainstream acceptance, more user-friendly tools, and resources will emerge, further simplifying the process for newcomers.

People can now learn about and use Bitcoin easily, thanks to the proliferation of educational materials, guides, and support communities.

(Not Exactly) Bananas Over Bitcoin

Back in 2017, Mark Cuban made quite a splash when he quipped during a WIRED video Q&A session that he’d prefer bananas over bitcoin, because, well, at least you can eat a banana. 

The context? He was discussing the value of gold during an economic depression and suggested that owning a gold bar would make you an easy target for thieves.

While Cuban’s remark was likely lighthearted (and lazy), it’s worth diving into the comparison between bananas and Bitcoin. 

On the surface, it might appear to be a witty observation, but when you dig deeper, the analogy starts to crumble. Bananas simply don’t possess the essential properties of money – durability, fungibility, and scarcity. Sure, they’re portable and divisible, but their perishability renders them a poor choice for value storage or exchange.

Bitcoin As Durable Money

In stark contrast, Bitcoin checks all the right boxes as a form of money. It’s durable, thanks to its digital ledger existence; fungible, with each unit being interchangeable; and scarce, capped at 21 million coins. 

These qualities, combined with portability and divisibility, make Bitcoin far more appropriate as both a store of value and a medium of exchange.

So, when you take a closer look, Cuban’s off-the-cuff comparison between bananas and Bitcoin seems like an oversimplified analogy that doesn’t quite stand up to the test. Sure, you can eat bananas and you can’t eat bitcoin, but you can’t eat any type of money. That’s what makes it useful as money.

Digital Gold

Mark Cuban was correct when he highlighted the importance of Bitcoin as a store of wealth, like gold. Bitcoin’s finite supply of coins and gold’s limited supply on Earth make them attractive options for preserving value over time, as scarcity prevents excessive inflation.

Another aspect that makes Bitcoin comparable to gold is its independence from traditional financial systems. Bitcoin operates on a decentralized network, which means it is not controlled by any single entity like a central bank or government.

This decentralization provides protection against factors that could erode the value of traditional currencies, such as economic mismanagement or political instability.

Bitcoin’s digital nature offers advantages over physical assets like gold, such as ease of access and transferability across borders, and thus isn’t subject to geopolitical influence that plagues the transfer and ownership of physical gold.

Mark Cuban Gets Rekt In DeFi (Like We Knew Would Happen)

There’s something attractive about finding a secret that nobody knows about, then exposing it to the public and being incredibly right. The search for the next bitcoin embodies that desire, and public figures can’t help themselves.

If it’s not advertising some new coin or protocol, at the very least it’s saying shit like “a bitcoin-like technology will be used in the future”, while making no effort to explain how a non-bitcoin, but bitcoin-like technology would emerge and overtake bitcoin (while still remaining decentralized).

Though he seems to have avoided the typical trap entrepreneurs in embracing enterprise blockchain (like Richard Branson), Cuban got rekt just as hard on DeFi, which was well-known bullshit from the beginning.

While Cuban was bragging about making 200% APY in DeFi, bitcoiners were screaming where does the yield come from?!

Of course, he got rekt in one of many high profile rug pulls in the DeFi ecosystem because these things are simply ponzi schemes under the guise “decentralized” finance. So while he shrugs his shoulders, saying “Live and learn.”, he seems to have not really learned that crypto and bitcoin are two different things.

Cuban’s Commentary Falls Flat Among Bitcoiners, But Resonates With The Mainstream

Mark Cuban’s evolving stance on Bitcoin has generated a variety of reactions from both the general public and the Bitcoin community. 

The strongest reactions were from prominent Bitcoiners regarding his comments on the WIRED Q&A, with many displaying dismay at his apparent lack of understanding of the technical fundamentals of Bitcoin. 

Jimmy Song, a Bitcoin Expert and author of “Bitcoin and the American Dream,” tweeted this reply to Cuban regarding his comments on Bitcoin being too hard for the average person:

Looks like @mcuban is still living in 2011

too difficult to use – wallets make it easy, especially as SoV

too easy to hack, way too easy to lose – backups make it easy

too hard to understand – @LittleBitcoinBk makes it easy

too hard to assess a value – s2f makes it easy

— Jimmy Song (송재준) (@jimmysong) December 10, 2019

Tyler Winklevoss, the co-founder of the Gemini exchange, also took aim at Cuban’s comments with a tweet:

"There’s so many peculiarities to Bitcoin: the halving, the mining." –@mcuban

The rules of basketball are far more peculiar, but that doesn't seem to be holding it back. https://t.co/GO5O3luDtT

— Tyler Winklevoss (@tyler) April 17, 2020

In contrast, in a Seeking Alpha blog, author Bram de Haas dissects Cuban’s Bitcoin commentary piece by piece. His most notable observation, however, pertains to the comments made by Cuban that wealth storage mediums such as gold and Bitcoin are more about religion than a solution – and it’s a positive reaction.

“…the comparison to religion is distracting, but not entirely off the mark.”

“It works because we believe. That also explains why true believers with considerable skin in the game of whatever get mad when someone challenges their set of beliefs. If the conviction is gone, the value is gone.” 

Here, I disagree. Belief is not what drives the value of bitcoin (or gold for that matter). You can choose to not believe that bitcoin or gold is a good store of value, but that doesn’t change its inherent properties. Even if you don’t think bitcoin has any value, the network keeps chugging along and blocks keep coming. You can choose to participate, or choose not to, but those who join the network sooner will have more to gain.

In a way, Cuban’s commentary actually reflects the general sentiment of the mainstream attitude toward Bitcoin over time. At first, quite skeptical, then reluctantly ceding some ground, but still not quite understand the full value prop of what bitcoin offers.