Mark Cuban: What I look at when comparing blockchains like bitcoin and ethereum

Mark Cuban: What I look at when comparing blockchains like bitcoin and ethereum

When comparing different blockchains, billionaire Mark Cuban looks at a few specific characteristics before investing.

“Most people look at speed and cost compared to BTC [bitcoin] or ETH [ethereum],” Cuban tells CNBC Make It. “While those things can be important, I look at blockchains as networks with development platforms via smart contracts.”

Cuban is referring to the capabilities of each blockchain beyond speed and cost of cryptocurrency transactions. Each blockchain, which is a decentralized digital ledger that documents cryptocurrency transactions and other information, is unique.

For example, the ethereum blockchain can execute smart contracts, which power decentralized applications like DeFi, or decentralized finance, and NFTs, or nonfungible tokens. The ethereum blockchain features its cryptocurrency ether, but can also work as a platform for other digital coins.

These aspects of ethereum are appealing to Cuban, he previously said. Due to its smart contracts, he likens this blockchain to the internet, since different platforms, from things like DeFi to social media sites, can be built on it.

Other experts agree. “Ethereum [is] looking for ways to become a fully working infrastructure platform,” Kathy Lien of BK Asset Management recently told CNBC. “Ethereum itself can perform a number of economic tasks, so it goes beyond” bitcoin, which is known as a peer-to-peer electronic cash system.

That’s why, according to Cuban, “the platforms that have the most active developers and create applications with significant utility for their users will have a network effect.” In turn, the blockchain could “generate significant fees,” which could fund the network, making it investible.

To mint, or blockchain verify, a token — like an NFT, for example — and transact on the blockchain, a user is typically charged a fee by the blockchain’s miners. These fees can be especially costly during high demand or congested periods.

In Cuban’s opinion, “depending on how fees are distributed, [it can] create a real revenue stream that increases the values of the tokens they mint,” he says.

For example, ethereum collects gas fees. That “makes it an income producing asset whose value should rise as its network expands,” Lien says.

Though some people may think that blockchains are only used for cryptocurrency transactions, the platforms could potentially be used for much more than that, as ethereum is. That’s why Cuban looks at the possible use cases for each blockchain before investing, rather than just the speed and cost to use them.

Cuban has invested in many blockchain companies this year, all of which are centered around smart contract capabilities. His portfolio includes NFT platforms, DeFi companies and ethereum scaling solutions.

Cuban has also been investing in cryptocurrencies like ethereum, bitcoin and others.

Sign up now: Get smarter about your money and career with our weekly newsletter

Don’t miss: This 25-year-old says he’s a millionaire after investing early in ether and bitcoin

Latest Ethereum price and analysis (ETH to USD)

Bloomberg

(Bloomberg) – Credit Suisse Group AG executives ignored warnings from colleagues about troubled steel tycoon Sanjeev Gupta as they channeled $1.2 billion of client funds to his businesses, according to people familiar with the matter.Bankers in Credit Suisse’s commodity trade-finance unit blacklisted Gupta’s Liberty Commodities Ltd. in 2016 because they suspected some of its deals weren’t legitimate, the people said. When they learned about two years later that the bank was lending to his companies through a suite of investment funds, which eventually grew to $10 billion, they flagged their worries to leaders in compliance and the division that housed the loans, one of the people said.The disclosure that Credit Suisse may have put clients at risk despite internal concerns over Gupta’s businesses adds a new twist to the debacle stemming from the March implosion of Greensill Capital, the finance firm at the center of the three-way relationship.Investigations, LawsuitsThe U.K. Serious Fraud Office is now investigating Gupta’s group of companies for suspected fraud, including in its financing deals with Greensill, according to a May 14 statement. Credit Suisse has sued to force Gupta’s Liberty Commodities into insolvency and has since shut the funds that made the loans and launched an internal investigation. Investors are staring at losses as the bank confronts embarrassing lawsuits.“We are currently focusing our efforts on recovering our investors’ money,” Will Bowen, a spokesman for Credit Suisse in London, said in an emailed statement, adding that the bank’s internal probe will focus on “all of the issues” linked to the funds. “We are committed to learning the lessons and will share the relevant lessons learnt at the appropriate time.”Andrew Mitchell, a spokesman for the Gupta Family Group Alliance, or GFG Alliance, a collective of businesses linked to Gupta including Liberty Commodities, denied any wrongdoing.The Greensill saga represents just one of the two disasters that rocked Credit Suisse in the first half of 2021. Since Greensill began unraveling, the bank has announced a $5.5 billion hit from the blowup at Archegos Capital Management.ApologiesFormer Chairman Urs Rohner apologized to shareholders and his successor, Antonio Horta-Osorio, who arrived at the end of April, has promised a sweeping strategy review.Chief Executive Officer Thomas Gottstein, who was head of the division that oversaw trade finance, wasn’t aware of the internal concerns about Gupta that had prompted the bank to cut him off, according to a person familiar with the matter.Employees at the trade-finance unit, which lends money for the buying and selling of commodities, cut ties with Gupta in 2016 after becoming skeptical toward his Liberty Commodities, the people said. They distrusted the documents the company provided, triggering doubts about its transactions, they said. In one example reported by Bloomberg, the company had presented another bank with what seemed to be duplicate shipping receipts. Credit Suisse’s commodity team had stopped working with Gupta after identifying suspicious shipments while the bank’s credit-structuring team lobbied against the Greensill funds, the Wall Street Journal reported in April.A spokesman for Gupta has denied any wrongdoing.Banking TiesLiberty Commodities pledged assets to Credit Suisse as security for borrowings in 2013 but by early 2016, all such commitments had been extinguished, indicating that the financing relationship had ceased, U.K. Companies House filings show. And while Gupta’s company listed the Swiss bank as one of its lenders in its 2014 annual report, it didn’t in the following year’s report, which is dated May 2016, according to the filings.Their counterparts at other banks, including Macquarie Group Ltd. and Sberbank PJSC, halted trading with Liberty Commodities around the same time because of similar concerns; Goldman Sachs Group Inc. also stopped in 2016, Bloomberg has reported.Nevertheless, executives at Credit Suisse’s asset-management division – which creates investment products for clients and charges a fee for overseeing them – began arranging a suite of funds focused on supply-chain finance in 2017. The entities bought securitized loans packaged by Greensill, a firm created by Australian businessman Lex Greensill. Much of the debts were linked to Gupta’s businesses.WarningsOfficials at the commodity trade-finance unit were concerned when they found out about the funds’ links to Gupta and took their fears to Thomas Grotzer, general counsel for the bank’s Swiss division. They also warned Luc Mathys and Lukas Haas, the bankers who helped oversee the trades at the asset-management unit.Grotzer was promoted last month to interim global head of compliance at Credit Suisse. He didn’t respond to requests for comment. Mathys, head of fixed-income at the asset-management division, and Haas, a portfolio manager, were put on temporary leave in March. Neither responded to requests for comment.The bank pushed ahead with the funds and marketed them to investors as being made up of short-term debt secured on invoices, assets considered so safe that Credit Suisse gave the largest vehicle its lowest rating for risk. Yet part of the loans were linked to mere possible future revenues.Other parts of the bank continued working with Gupta as well. Credit Suisse’s investment bankers were due to lead an initial public offering for Liberty’s U.S. steel arm, which was ultimately pulled, according to a statement from the company. Gupta also announced that the Swiss bank would finance his planned acquisition of Thyssenkrupp AG’s steel unit, which fell apart earlier this year.Credit Suisse has so far recouped about $5.9 billion of the $10 billion in these supply-chain funds, but it remains unclear how much will be returned ultimately to investors. Loans to Gupta’s businesses are among a batch of debts that are the “principal sources of valuation uncertainty,” the bank said earlier this month.Liberty Commodities’s external legal advisors investigated “alleged rumors concerning the paperwork” it used in 2019, according to Mitchell, the spokesman for GFG Alliance. They found no evidence to substantiate the rumors, nor was the company “ever subject to further complaints or proceedings,” he said.“LCL has ongoing banking relationships with separate financial institutions,” Mitchell said, referring to Liberty Commodities. “The trade-finance market has been hugely challenging for all but the very largest commodities traders in recent years. Nevertheless, no financial institution has been left out of pocket as a result of lending money to LCL. On the contrary, they have received substantial commercial returns.”More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Ethereum, Litecoin, and Ripple’s XRP – Daily Tech Analysis – May 29th, 2021

Ethereum

Ethereum tumbled by 12.07% on Friday. Following a 4.98% decline on Thursday, Ethereum ended the day at $2,413.81.

A mixed start to the day saw Ethereum rise to an early morning intraday high $2,762.91 before hitting reverse.

Falling short of the first major resistance level at $2,880, Ethereum slid to a late intraday low $2,329.2.

Ethereum fell through the 38.2% FIB of $2,740 and the first major support level at $2,720.

The extended sell-off also saw Ethereum fall through the second major support level at $2,505 to end the day at $2,400 levels.

At the time of writing, Ethereum was down by 0.25% to $2,407.84. A mixed start to the day saw Ethereum fall to an early morning low $2,396.20 before rising to a high $2,434.53.

Ethereum left the major support and resistance levels untested early on.

For the day ahead

Ethereum would need to move through the $2,502 pivot to bring the first major resistance level at $2,675 into play.

Support from the broader market would be needed, however, for Ethereum to break out from $2,500 levels.

Barring an extended crypto rally, the first major resistance level and resistance at the 38.2% FIB of $2,740 would likely cap any upside.

In the event of a broad-based crypto rebound, Ethereum could test resistance at $3,000. The second major resistance level sits at $2,936.

Failure to move through the $2,502 pivot would bring the first major support level at $2,241 into play.

Barring another extended sell-off, however, Ethereum should steer clear of sub-$2,000 levels. The second major support level at $2,068 should limit the downside.

Looking at the Technical Indicators

First Major Support Level: $2,241

Pivot Level: $2,502

First Major Resistance Level: $2,675

23.6% FIB Retracement Level: $3,369

38.2% FIB Retracement Level: $2,740

62% FIB Retracement Level: $1,725

Litecoin

Litecoin slid by 8.75% on Friday. Following on from a 2.43% decline on Thursday, Litecoin ended the day at $177.41.

A mixed start to the day saw Litecoin rise to an early morning intraday high $198.92 before hitting reverse.

Story continues

Falling short of the first major resistance level at $209, Litecoin slid to a late intraday low $165.50.

The extended sell-off saw Litecoin fall through the first major support level at $180 and the 62% FIB of $175.

Finding support at the second major support level at $166, Litecoin broke back through the 62% FIB to end the day at $177 levels.

At the time of writing, Litecoin was down by 0.23% to $177.01. A mixed start to the day saw Litecoin rise to an early morning high $179.91 before falling to a low $176.53.

Litecoin left the major support and resistance levels untested early on.

For the day ahead

Litecoin would need to move through the $181 pivot to bring the first major resistance level at $196 into play.

Support from the broader market would be needed, however, for Litecoin to breakout from $190 levels.

Barring an extended crypto rally, the first major resistance level and Friday’s high $198.92 would likely cap any upside.

In the event of an extended breakout, Litecoin could test resistance at $210. The second major resistance level sits at $214.

Failure to move through the $181 pivot would bring the 62% FIB of $174 and the first major support level at $162 into play.

Barring an extended sell-off, however, Litecoin should steer clear of sub-$160. The second major support level sits at $147.

A sustained fall through the 62% FIB of $174 would form a near-term bearish trend from 10th May’s swing hi $413.91.

Looking at the Technical Indicators

First Major Support Level: $162

Pivot Level: $181

First Major Resistance Level: $196

23.6% FIB Retracement Level: $322

38.2% FIB Retracement Level: $265

62% FIB Retracement Level: $174

Ripple’s XRP

Ripple’s XRP slid by 7.71% on Friday. Following a 5.79% fall on Thursday, Ripple’s XRP ended the day at $0.89936.

A mixed start to the day saw Ripple’s XRP rise to an early morning intraday high $0.98495 before hitting reverse.

Falling short of the first major resistance level at $1.0317, Ripple’s XRP tumbled to a late morning intraday low $0.84603.

Ripple’s XRP fell through the first major support level at $0.9224 and the second major support level at $0.8739.

The extended sell-off also saw Ripple’s XRP fall through the 62% FIB of $0.8573 before briefly revisiting $0.91 levels.

A bearish end to the day, however, saw Ripple’s XRP fall back to end the day at sub-$0.90 levels.

Support at the second major support level at $0.8739 and the 62% FIB of $0.8573 were both tested late in the day.

At the time of writing, Ripple’s XRP was down by 0.21% to $0.89744. A mixed start to the day saw Ripple’s XRP rise to an early morning high $0.90727 before falling to a low $0.89653.

Ripple’s XRP left the major support and resistance levels untested early on.

For the day ahead

Ripple’s XRP will need to move through the $0.9101 pivot to bring the first major resistance level at $0.9742 into play.

Support from the broader market would be needed, however, for Ripple’s XRP to break back through to $0.95 levels.

Barring an extended crypto rally, the first major resistance level and Friday’s high $0.98495 would likely cap any upside.

In the event of an extended rally, Ripple’s XRP could test resistance at $1.10. The second major resistance level sits at $1.0490.

Failure to move through the $0.9101 pivot would bring the 62% FIB of $0.8573 and the first major support level at $0.8353 into play.

Barring another extended sell-off, however, Ripple’s XRP should steer clear of sub-$0.80 levels. The second major support level sits at $0.7712.

A sustained fall through the 62% FIB of $0.8573 would form a near-term bearish trend from 14th April’s swing hi $1.96598.

Looking at the Technical Indicators

First Major Support Level: $0.8353

Pivot Level: $0.9101

First Major resistance Level: $0.9742

23.6% FIB Retracement Level: $1.5426

38.2% FIB Retracement Level: $1.2807

62% FIB Retracement Level: $0.8573

Please let us know what you think in the comments below.

Thanks, Bob

This article was originally posted on FX Empire

More From FXEMPIRE: