Dallas Mavericks owner Mark Cuban has acknowledged that bitcoin can indeed be a reliable store of value in a recent Twitter debate. Cuban, however, isn’t convinced about the pioneer asset’s potential to replace the current system. Notably, Cuban is an outspoken bitcoin naysayer who has previously stated that he would rather have bananas than bitcoin as the latter has no intrinsic value.
Cuban Doubts Bitcoin Is The Answer To The Struggling Global Financial System
In a Twitter thread on June 3, analyst Preston Pysh took to Twitter to discuss his view on the central bank’s money-printing spree and the long-term effects it will have on the economy. He noted that the Federal Reserve, in particular, has been “aggressively inflating” fiat over the past 11 years with its quantitative easing measures. For perspective, the Fed has expanded its balance sheet from 0.8 trillion to 7.1 trillion since 2008 to date.
These liquidity injections are necessary to keep the economy afloat. However, the money is not necessarily getting to the masses, and that’s why the government has opted for direct deposits to the citizens in the name of universal basic income (UBI). Psych argues that these checks are vital in order to prevent the civil unrest going on in the United States from spiraling out of control.
And just like QE, UBI also has dire consequences in the long haul. These are all the reasons why Pysh owns bitcoin to protect himself against a financial system that is doomed to collapse. “The people peacefully protesting on the streets have every right to be disgusted,” he observed.
Mark Cuban disagrees with Pysh’s assertion that bitcoin is the only way out in the current financial climate. He stated:
“You got a lot right, up until the btc part. Under an al btc system how does the inflation of btc from supply and demand impact those without assets and those trying to acquire btc? How will markets be made for goods and services? How fractionalized can btc become?”
Preston responded by noting that the price of bitcoin will decide who is right and who is wrong, adding that when BTC surpasses its $20k all-time high by January 2021, he will then answer Cuban’s call.
For Cuban, the price of an asset does not reflect its success in conquering all the issues plaguing the economy. The Shark Tank investor even likens bitcoin to spice in the famous novel “Dune”, in that “the more it is concentrated in fewer hands, the more likely to be hoarded and rarely made available at all.”
A fundamental disagreement is that you think it's price reflects it's success in defeating all the issues you mention. I see the opposite. The more it is concentrated in fewer hands, the more likely to be hoarded and rarely made available at all. Kind of like Spice in Dune
— Mark Cuban (@mcuban) June 5, 2020
BTC Can Be A Store Of Value But Not A Replacement For The Legacy System
Cuban then acknowledged that the top cryptocurrency can in fact act as a store of value. However, he has doubts on BTC’s fungibility. This is where he notes that the digital asset is unlikely to replace the existing financial system:
“It can be a store of value. But the conversation started with the challenges of the current federal reserve system. He isn’t wrong about the system. But he is wrong about the fungibility of btc and it’s ability to impact society as a replacement for the current system.”
This idea is in line with what Cuban opined in August last year when he posited that bitcoin is fundamentally similar to the precious metal, gold, as they are both collectibles. According to him, their value is based on supply and demand, which makes them terrible investments.
Well, I guess we will have to wait and see who is wrong.
