Should you follow Mark Cuban’s advice?
- Mark Cuban thinks Bitcoin is a better safe haven investment than gold.
- Cuban has argued that Bitcoin is better because it’s backed by a digital ledger.
- He believes your gold bar could be taken from you if the economy is in crisis.
Mark Cuban is a billionaire and was featured on Shark Tank. As a result, many people trust the financial advice he gives. He’s also a fan of cryptocurrencies and has indicated he’s a big investor in Bitcoin.
He recently explained why he thinks Bitcoin is a better investment alternative than gold. Here’s why Cuban thinks you should buy Bitcoin as a safe haven investment.
The simple reason Cuban prefers Bitcoin to gold
Recently, Cuban appeared on the Club Random podcast run by comedian Bill Maher. After Maher commented that he puts money in gold as a safe haven investment, Cuban indicated he believes this is not a wise choice and that Bitcoin would be a better alternative.
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“Gold is a store of value, and so is Bitcoin,” Cuban said. But Cuban believes that gold, unlike Bitcoin, isn’t a very safe investment to make as a hedge against economic uncertainty because someone could “kill you and take your gold bar,” in the event of a major economic catastrophe.
Because of the risk of having your physical gold stolen, Cuban has described investing in the metal as “useless.” Bitcoin is also a store of value, but unlike the precious metal, Bitcoin is “protected by a digital ledger.” Since Bitcoin is a digital asset, no one could just take it from you if things went wrong. For that reason, Cuban thinks it’s a safer bet.
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Should you invest in Bitcoin (or gold)?
Many cryptocurrency enthusiasts hope Bitcoin will one day become a digital version of gold, as there are commonalities between them, including the scarcity of both the physical metal and the number of Bitcoins that will be available over time. Cuban appears to suggest that Bitcoin could serve a similar purpose to gold as a store of value, but be an even better bet.
But there are important differences between them as well. Gold is tracked on a worldwide tracking system and has long been considered a safe-haven investment. It has a more-established track record. Bitcoin, on the other hand, is a newer alternative investment that has been embraced by many institutional investors and is the most well-established and respected of the cryptocurrencies.
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It’s essential to understand the attributes of both investment options if you are deciding between them. And it is very possible that neither investment would be the right choice for you for a few key reasons.
First and foremost, you should always make sure you invest only in things you fully understand. And both precious metals investing and cryptocurrency investing can be pretty complicated as well as fairly risky. So if you don’t know the details of investing in them, you should steer clear of both investments in favor of simpler alternatives available in your brokerage account, such as index funds that track the performance of the market as a whole.
While index funds tracking the market may experience a temporary decline during economic trouble, you shouldn’t be investing for the short-term anyway. And, the reality is, these assets present far less risk of losses over time than either Bitcoin or gold, so they may be a better bet for the majority of people than either of these two alternatives.