Mark Cuban wants in on the cryptocurrency boom even if it turns out he’s right that bitcoin is in a bubble.
“I have always looked at blockchain as a foundation platform from which great applications can be built,” Cuban said in an Aug. 19 email response to questions. “Hopefully we can find a few.”
Runa Capital principal Nick Tomaino was an early employee at digital currency exchange Coinbase Inc. and runs the cryptocurrency-focused blog The Control. They plan to differentiate 1confirmation from the slew of digital currency hedge funds that have sprung up recently by taking a page from the venture-capital play book.
Rather than investing in digital tokens through initial coin offerings or in the secondary market, 1confirmation plans to invest from $100,000 to $500,000 in early stage companies before their ICO, and help those companies develop their product. Once the startup is ready to issue an ICO, the fund hopes to negotiate a discounted price.
Earlier that month, Cuban tweeted that he didn’t know when or by how much the price of bitcoin, which has soared in value this year, would correct. He did acknowledge then that the blockchain technology backing bitcoin had value and that it “will be at the core of most transactions in the future. Healthcare, finance etc all will use it.”
For the most part, Cuban is accurate in that the value of assets and stocks rely on the market and the demand from investors. Government-issued currencies or fiat money is one example of an asset that does not solely rely on the market, because its value can be manipulated by central entities and financial authorities. Either way, for both assets that solely rely on the market, and currencies that require central entities to adjust their value, the concept of intrinsic value is inapplicable.