Bitcoin plunge: Billionaire investor betting on ’easier to use’ crypto to overtake BTC

US President Joe Biden is reportedly planning to raise capital gains tax to as high as 39.6 percent, from the current 20 percent. The cryptocurrency market, which would be affected by the move, reacted today, with Bitcoin crashing 10 percent to its lowest level since March. More than $200billion (£143.6billion) of value is thought to have been wiped off after a sell-off from investors, but Mr Cuban, whose net worth is an estimated $4.3billion (£3.1billion), believes the decentralised, open-source blockchain Ethereum will trump Bitcoin because of its unique smart contract feature.

He told Informed Few: “The limitations right now are transactions costs, right? They’re ridiculous.

“Because of that it actually puts a lid on the number of transactions and you see people being pushed towards private blockchains.

“At the same time, smart contracts are real and smart contracts on blockchain remind me of the early days of the Internet when people realised that there is a network effect.

“With just HTML and some basic JavaScript you could do a whole lot of business and create a whole lot of new business.”

A smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code.

This allows for trusted transactions and agreements to be carried out without the need for a central authority, legal system, or external enforcement mechanism.

Mr Cuban added: “There used to be companies that only sold books in bookstores, and then Amazon came along.

“There was only radio and television and then audio and video could be broadcasted, and now streamed.

“It took 25 years to get from there to here.

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“We’re right at that point right now where smart contracts, in particular, on top of blockchain, allows people to take anything that is digital and turn it into a product.

“What has really changed everything is that it is becoming friction-free banking, where it’s easier to borrow in seconds.”

Mr Cuban sees this technology revolution as being extremely malleable in the future.

He continued: “If I was to buy new stuff, I would buy Ethereum on a pullback before I buy Bitcoin.

“When it pulled back to $30,000 (£21,600) I didn’t buy more. Ethereum pulled back to $1,000 (£721) and I did.

“I think Ethereum is going up and up and up because it is easier to use.

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“I think it has the advantage right now over Bitcoin in terms of regular people.”

Britain’s Financial Conduct Authority (FCA) has previously warned against investing in crypto.

It stated: “If consumers invest, they should be prepared to lose all their money.

"Some investments advertising high returns from crypto assets may not be subject to regulation beyond anti-money laundering.

“Significant price volatility, combined with the difficulties valuing [Bitcoin] reliably, place consumers at a high risk of losses.” does not give financial advice. The journalists who worked on this article do not own cryptocurrency.

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