Exclusive: Buy cryptos that have utility value, says Mark Cuban

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Asserting that the price of tokens is the least important and least interesting aspect of cryptocurrencies, billionaire investor Mark Cuban advises investors to buy digital currencies with real utility value.

In an interview with Moneycontrol, Cuban said cryptocurrencies should be regulated “optionally” with the choice of a minimal listing with OTC and pink sheets.

Pink sheet, or over-the-counter (OTC) securities, refer to stocks and assets that are not listed on a major exchange and are traded through a broker-dealer network.

Token speculation

“I don’t think anyone should speculate on tokens. I think they should look at what applications they use and buy tokens to use for those applications,” the Dallas Mavericks owner said. “There is far too much token speculation. The pricing of tokens is the least interesting and least important aspect of crypto.”

“Being able to do things that you can’t do without crypto, like smart contracts enabled apps like DeFi (decentralised finance) and NFTs (non-fungible tokens) and being able to buy carbon offsets or insurance and hopefully, future impactful apps, are what makes tokens important,” he added.

The avid crypto enthusiast suggested optional regulation of cryptocurrencies, preferably under the Commodity Futures Trading Commission (CFTC).

“There are tens of thousands of equities that have the option of possibly registering with the NYSE or Nasdaq or doing a minimal listing with OTC and Pink sheets. The same options should be available to tokens,” the Shark Tank star said.

Ethereum Merge

Cuban said the anticipation over the Ethereum Merge, the much-anticipated upgrade of the virtual currency to a more energy-efficient network, is one of the credible reasons behind the rally in the cryptocurrency market over the past few weeks.

“People look for a lot of reasons to buy in a momentum-driven market. What the actual impact will be is unknown to everyone. It’s a guess,” Cuban said.

Even as Bitcoin, the world’s largest digital currency, fell as much as 75 percent from its all-time high in November last year, crypto prices, notably that of BTC and Ethereum, rebounded considerably in July, gaining 36 percent and doubling, respectively, from their mid-June lows.

Ethereum, the second-largest digital asset, will transition from an energy-intensive proof-of-work consensus to a more energy-efficient proof-of-stake mechanism through a merger of two blockchains, known as the Ethereum Merge, in the week of September 19.

Asked about the future of the metaverse, which is a virtual environment where people can interact, Cuban said buying land in the metaverse was the “worst mistake” anyone could make because there can be an unlimited number of metaverses and they will not necessarily be able to connect and neither are there any standards.

“This means that it’s relatively cheap to create an unlimited number of plots of land across an unlimited number of metaverses across an unlimited number of blockchains,” he said.