Here's Why Shark Tank's Mark Cuban Prefers Bitcoin Over Gold During a Major Economic Crisis

In a recent interview with Wired, billionaire entrepreneur Mark Cuban highlighted that investors are beginning to view Bitcoin the same way as gold in terms of "store of value."

Gold is a time-tested tangible asset that has surged in value during the major recessions of the past half-century. Its universal demand, global acceptance, high exchangeability, and limited supply are among the factors contributing to the precious metal's intrinsic capital appreciation over time.

Cuban explained that "gold isn't based off the supply and demand of jewellery," and investors tend to flock towards the asset "in the event of the economy going down." He said that Bitcoin is one of the newest forms of currency, but many investors treat it like gold because they see the digital asset as a "great store of value."

Cuban added that he agrees with people who view Bitcoin as an upgraded version of gold and that the digital asset could have an edge during a major economic crisis.

Bitcoin Is Easier To Exchange For Smaller Transactions

Investors buy gold to hedge portfolio risks during recessions and periods of sticky inflation. In extreme situations, like if the US dollar collapses, gold's track record as a valuable currency could help investors stay afloat. However, gold in the bar form is challenging to exchange for goods and services.

"People aren't gonna walk around with gold bars. 'Oh, look, he owns gold.' Bam! 'Now I own gold,'" the Shark Tank star said. "What are you gonna do with it? Let me slice you off a little piece?"

While highlighting that exchanging gold in physical form might not be practical, Cuban pointed out Bitcoin is more portable and easier to use for smaller transactions. "It's easier to buy and sell," he said. "You can fractionalise it, you can buy things, you can transfer it internationally. And so I think it has more value than gold."

Bitcoin Is An Emerging Investment Choice For The Younger Generation

Many gold investors also hold the asset due to its negative correlation with the stock markets. Gold prices have jumped over 11% in the past six months to £2,216 ($2,685) per ounce on 13th January.

Meanwhile, people who buy Bitcoin are more susceptible to stock market movements and fluctuate violently based on market sentiment. However, financial expert Suze Orman believes investors hold Bitcoin, thinking the asset will appreciate in value.

"As younger people make more money and mature, [Bitcoin] will be one of their investments of choice, and that will cause it to go up," she told CNBC Make It. "I don't think it will ever be a currency or a store of value. But because the younger generation has a fascination with it — and you see the energy — a whole lot of people having an interest in it, eventually it could very well catch fire."

However, Bitcoin price trends are dominated by investor demand, and buying it with your hard-earned money can be risky. Bitcoin prices have jumped over 56% in the past six months to breach the £82,540 ($100,000) mark but have declined by more than 8.5% to under £76,762 ($93,000) in the last month.

Cuban disclosed during the interview that he holds "a lot" of Bitcoin and hopes the prices would go up further.

Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn't indicate future returns.