Billionaire investor Mark Cuban says he unloaded most of his holdings after seeing how BTC’s price reacted during a time of major geopolitical conflict.
The News
In a new interview with Front Office Sports, Cuban says his investment thesis in Bitcoin was invalidated when BTC failed to rally while gold surged after the US attacked Iran earlier this year.
“I think Bitcoin has lost the plot. I think Bitcoin has lost the plot. And when I started buying Bitcoin, and I’ve sold all of it, except not all of it, most of it. It was because when all the shit hit the fan with the Iran war, Bitcoin was always the best alternative to fiat currency losing its value. I always thought it was a better version of gold than gold. Well, gold just blew up and went to $5,000. Bitcoin dropped.”
Cuban also says that Bitcoin did not perform as expected when pitted against the dollar.
“Every time the dollar dropped, Bitcoin should have gone up. Because if it’s priced in dollars, it was cheaper. So anybody from around the world could go pay in dollars. And it just didn’t do that. Not such a good thing.”
What It Means for Investors
During the 2020 bull market, Bitcoin firebrands like Michael Saylor and Raoul Pal popularized the narrative that BTC is the best asset to hedge against inflation and US dollar debasement. Saylor said that cash is trash and a melting ice cube, an investment thesis that drove his company, Strategy, to pivot as a Bitcoin Treasury firm holding 843,738 BTC worth more than $65 billion.
Meanwhile, Pal has been a strong proponent that Bitcoin rises alongside growth in the global money supply (M2).
But Bitcoin’s history has shown that its use case has always evolved with time. During the 2013 bull market, Bitcoin was touted as the next big thing in online payments. The narrative failed to materialize because BTC is volatile, and it is not designed to process instant payments at scale. When the Covid pandemic hit and stimulus checks flooded the US economy, Bitcoin evolved as a hedge against inflation after outperforming gold at the time.
Today, Bitcoin and crypto bulls say the asset class will rise as AI agents take over the digital economy. Specifically, stablecoin-issuer Tether CEO Paolo Ardoino said that current payment rails are not designed to handle the trillions of transactions coming from billions of AI agents, arguing that the blockchain is the only technology that can support the incoming scale of agentic payments.
It appears that Cuban is right when he said that Bitcoin has lost the plot because BTC has always been losing the plot. It’s a feature, not a bug. Bitcoin’s use case will continue to evolve based on people’s needs.
Meanwhile, gold has been stuck with the narrative as a hedge against fiat currency collapse for thousands of years, while the US dollar’s purchasing power has been in a downtrend since 1693, according to Statista data.
For Bitcoin investors, take comfort in the idea that BTC is here to stay, with a use case that evolves according to the needs of the time. But just like any other asset, Bitcoin will go through bull and bear markets that have so far been in line with its halving cycles, when block rewards are slashed in half.
Despite Bitcoin’s correction from its all-time high of $126,000, institutional investors and banks, like Morgan Stanley and Goldman Sachs, are gaining exposure via ETF offerings, while the list of Bitcoin Treasury Companies continues to grow.
All in all, Cuban selling most of his Bitcoin holdings is a major bottom signal. Bear markets have historically ended when long-term investors capitulate, and Cuban’s move suggests that the worst of the Bitcoin bear market is over.
Photo by Thought Catalog on Unsplash
Disclaimer: Opinions expressed at CapitalAI Daily are not investment advice. Investors should do their own due diligence before making any decisions involving securities, cryptocurrencies, or digital assets. Your transfers and trades are at your own risk, and any losses you may incur are your responsibility. CapitalAI Daily does not recommend the buying or selling of any assets, nor is CapitalAI Daily an investment advisor. See our Editorial Standards and Terms of Use.