Bitcoin is a “better version of gold” in crises

Although Bitcoin is among the newest forms of currency, Mark Cuban says many investors treat it as one of the oldest: gold.

Attention b “Gold does not depend on the supply and demand for jewelry,” the billionaire investor said last week during a press conference. Interview with Wired. “People see it as an option in case the economy goes down or something bad happens.”

Many people who own Bitcoin — The largest cryptocurrency in the world – displayed in the same way, such as “Great store of value“In a real economic crisis, bitcoin might have an advantage,” Cuban says. “People look at bitcoin as a better version of gold, and I agree with that.”

The word you’ll hear gold investors use over and over again is “HedgingOften, investors hope that gold can hold its value when problems arise, and include the precious metal in their assets based on its reputation for holding up during periods of inflation. Indeed, gold’s record on this front is checkered.

In the most extreme example that Cuban cites, where the US dollar collapses, for example, gold’s long-standing reputation as a valuable currency may prevent its holder from going bankrupt. Here’s the problem, though. Gold – especially in bullion form – is heavy, easy to steal, and difficult to exchange for goods and services.

It’s not practical. “People aren’t going to walk around with gold bullion. ‘Oh, look, he’s got the gold.'” BAM! “Now I’ve got the gold,” Cuban joked. “What are you going to do with it? Let me cut you into a small piece?”

Despite its high price, Bitcoin is more portable and easier to use than the precious metal Smaller transactions, Cuban said. So in addition to working as As a store of value, Bitcoin can be a functioning currency. “Buying and selling is easier,” he said. “You can retail it, you can buy things, you can transfer it internationally. So I think it has more value than gold.”

“As young people earn more money and mature, [bitcoin] “It will be one of their favorite investments, and that will cause it to go up.” Orman recently told CNBC Make It. “I don’t think it will ever be a currency or a store of value. But because the younger generation is fascinated by it and — you see the energy — a lot of people are interested in it, it could very well be possible that it eventually catches fire.”

Since the price of Bitcoin moves based on investor demand, betting on it as an asset can be risky. Financial experts generally recommend only spending as much money in cryptocurrency as you are willing to lose.

Given Cuban’s wealth, it is unclear what that threshold is for him. However, his cryptocurrency holdings appear significant. He told Wired’s Lauren Goode that he owned enough Bitcoin and that he was really hoping the price would go up.

When Judd went on to ask how much he was carrying, he replied: “A lot.”

Do you want to improve your AI skills and be more productive? Take the new CNBC online course How to use AI to be more successful at work. Expert instructors will teach you how to get started, practical uses, tips for effective writing prompts, and mistakes to avoid. Pre-register now and use coupon code EARLYBIRD to get an introductory 30% discount through February 11, 2025.

plus, Sign up for the CNBC Make It newsletter For tips and tricks for success in business, money and life.