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Mark Cuban sides with Ethereum

·4-min read
Close up Ethereum coin with other crypto coins.
Ethereum has multiplied its price more than five times this year. (Source: Getty)

When it comes to investing in cryptoassets, billionaire investor, serial entrepreneur, owner of the Dallas Mavericks and US Shark Tank host Mark Cuban seems to know a thing or two.

So you may wonder which cryptoassets Cuban believes are most worthy of placing your hard-earned money into.

According to an interview he did with CNBC in October, 2021: “As an investment, I think Ethereum has the most upside.”

Looking at Ethereum’s stellar performance over 2021, it’s clear to see why he has such an opinion.

So far this year, Ethereum (ETH-USD) has multiplied its price more than five times, and is now worth USD$4,351.06, according to Coinmarketcap.

So, why has Ethereum experienced such highs in 2021? Here’s a look into the cryptoasset including why Cuban is an avid supporter, how it has continued to impress investors, and if there are any threats that might hinder its bull run in the future.

Why Mark Cuban is an ‘Ethereum maxi’

Self proclaimed “Ethereum maxi”, Cuban has confirmed he favours Ethereum as a result of its utility.

Compared to other cryptoassets that have minimal use cases, Ethereum is not only the most used blockchain, but its smart contracts power most blockchain-based projects, from decentralised finance (DeFi) applications, to non-fungible tokens (NFTs).

Cuban previously said Ethereum’s smart contracts had “really changed everything” in the crypto space and confirmed he wished he had bought Vitalik Buterin’s brainchild sooner because it was the closest thing to “a true currency”.

In a tweet posted on 16 October, 2021, Cuban wrote: “I like [ether] more [than bitcoin] because I can see an unlimited number of applications that will change the biz [and] consumer world forever … and to use them, you need to buy [ether].”

While Cuban may now be singing the praises of Ethereum and other cryptoassets, earlier in the year this wasn’t exactly the case. In fact, he made headlines for stating that he’d rather buy bananas than Bitcoin, calling it “too complicated”. Now he calls Bitcoin “better gold than gold”.

Ethereum’s 2021 bull rally

It’s fair to say 2021 has been Ethereum’s year. Up nearly 1,000 per cent since 2020, the cryptoasset has proven Bitcoin isn’t the only one beating all-time highs (ATHs).

Unlike Bitcoin – of which price growth was fueled in part by the new Proshares Bitcoin Strategy ETF and El Salvador making Bitcoin a legal tender – the rally on Ethereum initially came from technological developments that caused much excitement among investors.

One of the first was the “Berlin update”, which was rolled out on the Ethereum network in April 2021, an update meant to pave the way for reduced ETH gas prices or reduced transaction fees.

Next was the arrival of Uniswap V3 in May 2021, a smart contract protocol that was expected to further optimise Ethereum trading.

Another drive for Ethereum’s rally has been the surge of popularity for NFTs, many of which run on Ethereum’s network. One of the most expensive NFTs sold for more than 38,000 ETH (USD$69.3 million).

Having broken the USD$4,000 level in late October, the cryptoasset has continued to spike, hitting another ATH USD$4,768 in early November (up around 59 per cent since the beginning of October) as a direct result of the release of an important upgrade to the Ethereum network, called Altair.

Altair is one of the pivotal upgrades for Ethereum 2.0, which is anticipated to change the Ethereum infrastructure, ultimately making mining obsolete.

Will Ethereum lose momentum in 2022?

The Ethereum blockchain processes more transactions per day than any other cryptoasset, making payments faster and productive. Right now, it’s not cheap to transact on Ethereum due to the ‘gas fees’, however, Ethereum 2.0 should be finalised in 2022, which is set to change this.

In the same breath, the Ethereum 2.0 upgrade will bring a vast range of capabilities while making the network more secure and sustainable. If Ethereum manages to retain its status as the main platform for DeFi and smart contracts, then it has the potential to grow further.

Within the past 12 months, there has been a rise of other DeFi cryptoassets such as Solana and Polygon, dubbed “Ethereum killers”. Although experts believe these cryptoassets may one day steal Ethereum’s DeFi crown, for now, the world’s second-most-popular cryptoasset appears pretty safe.

So, has Cuban predicted a winner? It’s hard to say. As with most cryptoassets, Ethereum is subject to volatility.

For those looking to invest in Ethereum, they should follow the basic tenets of investing, including only investing what they can realistically afford, doing their research and opting to adopt a long-term investment strategy.

Josh Gilbert is market analyst at eToro.

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