Crypto prices increasingly reflect “real demand”

In a Twitter thread today, billionaire investor Mark Cuban weighed in on the current state and the future of blockchain technology and investment, ultimately concluding that while there are real obstacles to adoption asset prices are increasingly reflective of real “utility” and “demand,” and that the day will eventually come when crypto is “mature to the point we wondered how we ever lived with out.”

Cuban posted the 10-Tweet thread this morning, noting that as the asset class matures prices for cryptocurrencies often are now a byproduct of current use, as opposed to speculative eventual utility.

Crypto and each implementation is evolving in real time from “what is the potential utility” to “What is the current utility and how many users does it have”. Tokens/Coin prices are now less a bet on the future and more a reflection of real demand.

— Mark Cuban (@mcuban) May 15, 2021

“Having more TPS and lower gas fees is not enough,” he wrote, likely referring to often grandiose claims from various layer-one chains with little activity, “There must be a CURRENT network effect and significant user growth. This is a challenge for most L1s and L2s because w few exceptions, marketing in the crypto universe is beyond awful.”

He noted that he often leaves teams “confused” when he asks about “their products, sales , gross margin dollars and profits,” but that these metrics are hugely important in what he characterized as a tremendously competitive field.

Without users what value does a blockchain or L2 solution have ? But, they still haven’t figured out how to sell. They pay premiums to developers and for liquidity and validators. But invest little Marketing to attract users

— Mark Cuban (@mcuban) May 15, 2021

In addition to marketing woes, the Dallas Mavericks owner said that a lack of widespread understanding about key mechanics such as protocol governance is hampering growth. Not enough is being done, he argued, to “emphasize the impact governance can have on platforms, and their products/services.”

Eventually, however, he believes that governance participation — which at its best can be a “thing of beauty” — will become standard:

“I think over time, governance will be expected of all users and most will contribute by at least voting. But today, it is little understood and that’s is stunting some platforms growth.” 

One crypto gets over its current phase — one where users need to “be educated and products and services need to be sold and deliver on their initial promises” — then digital assets “can mature to the point we wondered how we ever lived with out.” 

Cuban has been especially bullish in his comments on cryptocurrencies as of late, most notably reiterating his support for BTC and Dogecoin as payment options following disparaging remarks from fellow billionaire Elon Musk that may well have crashed markets: 

We at https://t.co/VUydpLFzGh will continue to accept BTC/Eth/Doge because we know that replacing Gold as a store of value will help the environment https://t.co/bs7NvnJY8A and https://t.co/ELhbuLOBRV shrinking big bank and coin usage will benefit society and the environment https://t.co/zu08F0STEQ

— Mark Cuban (@mcuban) May 12, 2021