Mark Cuban: If the economy takes a turn for the worse, I'd rather hold bitcoin than gold, as I believe it has greater value.

Mark Cuban claims that many investors handle bitcoin as if it were gold, despite being one of the newer forms of currency.

Last week, during an interview with Wired, the billionaire investor stated that interest in gold isn't driven by the supply and demand of jewelry. Instead, people view it as a safe haven in times of economic uncertainty or unexpected events.

Cuban views bitcoin as a "great store of value" and believes it may have an advantage in a true economic crisis, as people see it as a better version of gold.

How gold and bitcoin could work as stores of value

Investors frequently employ the term "hedge" when discussing gold. They often include gold in their portfolios in the hope that it will maintain its worth during challenging times due to its reputation for performing well during inflation. However, gold's track record in this regard is inconsistent.

In the event of a dollar collapse, gold's reputation as a valuable currency could prevent financial ruin. However, gold, particularly in bar form, is heavy, easily stolen, and challenging to exchange for goods and services.

"Gold bars are not practical for everyday use. 'Oh, he has gold.' Bam! 'Now I have gold.' What are you going to do with it? Let me give you a piece," Cuban joked.

Bitcoin, although expensive, is portable and easier to use for smaller transactions compared to precious metals, Cuban stated. As a result, it can serve as both a store of value and a functioning currency. "It's easier to buy and sell," he said. "You can fractionalize it, you can buy things, you can transfer it internationally. And so I think it has more value than gold."

Gold and bitcoin: the difference for investors

Many investors who hold gold or bitcoin are not preparing for economic disaster. The primary argument for gold is that its value fluctuates differently than traditional portfolio investments, such as stocks and bonds. During times of market instability, investors often move from riskier assets to gold, causing its price to rise.

Bitcoin, unlike other assets, is considered riskier due to its high volatility, which closely mirrors the fluctuations of the stock market.

Numerous investors possess cryptocurrency with the expectation that its value will increase, just like Suze Orman's rationale.

"Bitcoin will likely become a popular investment among younger people as they earn more money and age, according to Orman. While he doesn't believe it will ever serve as a currency or store of value, the younger generation's fascination with it and growing interest could cause it to gain momentum."

Investing in bitcoin can be risky due to its price volatility based on investor demand. Financial experts advise investing only as much money as you're willing to lose.

Despite his wealth, it is uncertain what the threshold for Cuban's crypto holdings would be. Nonetheless, his crypto holdings appear significant. Cuban disclosed to Wired's Lauren Goode that he owned enough bitcoin to hope the price would increase.

When Goode inquired about the amount he held, he responded with "A lot."

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