Mark Cuban: $20.0 Million Cryptocurrency Investment
Just weeks after calling Bitcoin a “bubble,” billionaire Mark Cuban is eating his words. Or at least he’ll be able to once he takes his foot out of his mouth.
Cuban made his criticisms of cryptocurrencies in June, but by the end of July, he was shilling for initial coin offerings (ICOs). Then, in August, he invested millions into a cryptocurrency venture capital fund.
Now investors want to know which cryptocurrency is likely to win over Mark Cuban: Ethereum or Bitcoin. Not only does the winner get access to his billion-dollar wallet, but they can use his celebrity status to market their business.
Because let’s be honest: Mark Cuban is a celebrity.
He plays poker with Tiger Woods, hosts a reality TV show, and publicly feuds with the President. Everything he does is Page Six news, so when he lends support to a project, it goes mainstream. Plain and simple.
Which is what makes the recent Mark Cuban investments so interesting. You might notice a pattern:
- Unikrn: An e-sports betting company looking to raise money through an ICO.
- Mercury Protocol: A blockchain-based plug-in for messaging apps and browsers.
- VC Fund: An investment vehicle for funding early-stage blockchain companies.
If actions speak louder than words, then Cuban is shouting from the rooftops, “I AM BULLISH ON CRYPTOCURRENCIES!” But being the savvy businessman that he is, Cuban likely downplayed his interest to the broader public.
Mark Cuban: Ethereum Over Bitcoin
When asked about his investments into blockchain companies, Mark Cuban responded that he “[might] have to finally buy some” Bitcoin based on its demand pressures.
Here, Cuban seems to say that Bitcoin has potential. But the truth is that none of Cuban’s investments involve Bitcoin. He’s using misdirection again, because that’s what great businessmen do under the media spotlight.
If he had told the truth—that his upcoming investments are based on Ethereum—investors would bid up the price of ETH, making it more expensive for him to conduct his business.
But make no mistake, each of these endeavors reflects Mark Cuban’s bullishness on Ethereum.
Unikrn is a startup based out of Seattle, Washington. It was successful raising money the good ol’ fashioned way, through venture capital, but now the company is experimenting with an initial coin offering on the Ethereum platform.
It will hold its Unikrn ICO between September 22 and October 1. By selling tokens under the symbol UNIKOINGOLD, the company hopes to raise $100.0 million worth of ETH tokens. Not a bad chunk of change, I might say.
And what does Unikrn give up in exchange for these funds?
Equity? Absolutely not. Initial coin offerings don’t give investors a piece of the company they are investing in. They give store credit. You can only use UNIKOINGOLD towards Unikrn’s products. Unless, of course, you sell it into Ethereum or Bitcoin.
A tagline for the Mercury Protocol describes it as “the future of communication platforms built on the Ethereum blockchain.” It literally has Ethereum in the first sentence.
That’s not a coincidence, either. Bitcoin is incapable of hosting the Mercury Protocol, because—and I’m going to receive some backlash for saying this—it’s a one-trick pony.
Bitcoin wants to create a global, frictionless currency. End of story.
Ethereum is, on the other hand, a blank canvas. Developers can make decentralized applications, write smart contracts that self-execute, and raise money through initial coin offerings. The Mercury Protocol is one of those applications.
It’s essentially trying two things:
- To improve privacy protections in messaging apps.
- Promote constructive behavior on social media.
Both of these are lofty goals, but the upside potential is huge. Harassment and trolling are two of the biggest complaints about online behavior at the moment. Give customers an alternative and I think they’ll leap at the opportunity.
But I digress. The point is that Ethereum allows for unrestrained possibility. Bitcoin does not, and Mark Cuban can tell the difference.
You may have seen a few headlines about Cuban starting a “Bitcoin hedge fund.” That’s all nonsense. Cuban set aside $20.0 million for crypto investments, to be sure, but he said nothing about Bitcoin.
In fact, what he said confirmed that he’s bullish on Ethereum. “I have always looked at Blockchain as a foundation platform from which great applications can be built,” he said. (Emphasis added.)
Once again, you can’t create applications on Bitcoin.
But you can on Ethereum. Which is, in all likelihood, where the VC fund will search for its pre-ICO investments.
Cuban has the right idea. He’s skeptical of end consumers understanding or caring about cryptocurrencies because there’s no evidence of an uptick in transaction use. Speculation is driving the price Bitcoin et al.
Investing in decentralized applications and smart contracts are definitely the way to go, especially for an entrepreneur that is used to create real value.