Top line

Donald Trump’s growing support Among the prominent figures in technology is a “bitcoin game,” Billionaire Trump postulated critical Mark Cuban, offering a debatable — and in Cuban’s words, “contrarian” — theory that the potential deterioration of the American economy under the Trump administration will make Silicon Valley’s top bitcoin investors even richer.

Billionaire Mark Cuban believes there’s a deeper reason behind Trump, Silicon Valley… [+] to lean.

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Key facts

“You can’t align the stars better for a BTC price acceleration” than a Trump presidency, Cuban wrote in a Wednesday publish in X, arguing that it is not due to Trump flat to regulate less the cryptocurrency industry, but rather the consequences of Trump’s broader economic vision.

Lower taxes and higher tariffs, especially on Chinese imports, will worsen inflation, Cuban predicted, and higher inflation typically prompts investors to shift their money into assets considered more likely to store value, such as commodities like gold or safe-haven currencies, the most famous of which is the U.S. dollar.

But “global uncertainty about the geopolitical role of the U.S.” under Trump could cause “the decline of the dollar as the reserve currency” of choice, Cuban theorized, alluding to the prospect of “hyperinflation,” in which prices skyrocket in the currency issued by a country’s central bank.

A dollar decline would cause the market to flood into the new de facto “global currency,” bitcoin, which is not backed by a central bank and whose proponents have long argued is the ultimate safe haven due to its relative independence from global financial and political systems, causing bitcoin prices to soar due to the digital asset’s scarcity.

That would make the many bitcoin holders, such as Trump supporter Elon Musk (whose companies SpaceX and Tesla hold large portions of the token) or early bitcoin investors and pro-Trump donors Cameron and Tyler Winklevoss, extremely wealthy, Cuban noted.

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Against

Unsurprisingly, given that Cuban has admitted that his theory is a “contrarian opinion” and possibly “crazy,” there are plenty of flaws to be found in Cuban’s argument. For one, periods of intense inflation are bad for most industries, since consumers’ diminished purchasing power typically leads to lower profits, similarly causing corporate valuations to decline as earnings potential diminishes. Basically, for someone to truly profit from the scenario Cuban described, in which bitcoin surges while the broader economy collapses, they would already need to have an outsized portfolio exposure to bitcoin and little exposure to cash or U.S. Treasuries. That’s not true for many of Trump’s big tech supporters with large investments in public and private companies, like Musk, who owns over $100 billion in publicly traded Tesla stock, or venture capitalists like Marc Andreessen and Ben Horowitz. In simple math, Tesla sustained 9,720 bitcoins by the end of 2023, worth about $6.3 billion at bitcoin’s roughly $65,000 price on Wednesday. If bitcoin prices were to triple, Tesla would have a stake worth nearly $20 billion, a total equivalent to less than 3% of the company’s $800 billion market capitalization, hardly moving the needle.

Crucial quote

Asked by Forbes about the reasoning behind the apparent dissonance between bitcoin’s rising value amid high inflation and the declining value of all other investments, Cuban explained in an email that corporate stakeholders deal with “execution uncertainty and market forces” and the “incredibly difficult” process of passing legislation that is beneficial to a company’s valuation. However, “with BTC, you just hit the refresh button :),” Cuban wrote.

Main context

Cuban, with a net worth of US$5.4 billion according to According to Forbes estimates, he first became wealthy from the sale of the streaming service Broadcast.com during the dot-com boom of the 1990s and was the majority owner of the NBA’s Dallas Mavericks from 2000 to 2023. Both Cuban of “Shark Tank” and Trump (worth $6.1 billion) of “The Apprentice” became famous for their reality television business shows, but Cuban, a burning Biden supporter has no plans to enter politics despite rumors of a presidential run, he counted Forbes in 2020.

Tangent

Historically On the left, several notable Silicon Valley products have expressed support for Trump in the past week, including Musk on Saturday and Andreessen and Horowitz on Monday. Horowitz and Andreessen have told employees at their influential Silicon Valley investment firm that they intend to donate to political action committees that support Trump’s election. Horowitz explained Trump is the “right choice” for tech due to the Biden administration’s regulation of sectors like artificial intelligence and cryptocurrencies.

Further Reading

ForbesTrump wins more big tech backers: Billionaire venture capitalist Andreessen joins wave of support for former presidentBy
ForbesBillionaire Biden donor slams White House’s treatment of Tesla after Musk’s apparent donation to Trump

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