Here’s Why Mark Cuban Wants Bitcoin to Go Down a Lot Further

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The reason may surprise you.  

Mark Cuban is a billionaire investor who is well-known for his role on Shark Tank as well as for his ownership of the Dallas Mavericks.

He’s also a fan of cryptocurrency investing — which is why it may come as a big surprise that he indicated in a recent interview with comedian Bill Maher that he hopes the price of Bitcoin goes down.

Since Cuban has indicated before that the bulk of his crypto investments are in Bitcoin, it may seem on the surface to make even less sense that he wants the price of the virtual currency to decline further. But there’s a good reason why he made that statement.

Cuban wants Bitcoin’s price to decline for one simple reason

So, why is Cuban hoping Bitcoin’s price falls?

Cuban told Maher on the comedian’s podcast that, “I want Bitcoin to go down a lot further so I can buy some more.”

Essentially, Cuban believes that over the long term, Bitcoin is going to perform well as an investment. In fact, he explained why he believes the virtual currency is a solid asset, indicating that it’s a store of value protected by a digital ledger. Because of this, Cuban thinks Bitcoin is a better investment than gold since if everything went wrong, someone could take your gold bar from you when that’s not the case with your Bitcoin investment.

Since Cuban thinks Bitcoin has solid potential to see its value grow, he is hoping the price temporarily declines to give him an opportunity to buy more of the coins at a discount before things turn around.

In other words, he was simply indicating that he believes he will be able to take advantage of the opportunity to buy a valuable asset at a low price and sell it for much more later. And that’s a goal any smart investor will understand.

Cuban’s investing style makes a lot of sense

Whether you believe Bitcoin is a good investment or not, Cuban’s desired strategy of taking advantage of a temporary price reduction to increase his holdings of an asset is a good approach.

In fact, it’s one that other famed investors such as Warren Buffett have endorsed. Buffett has famously indicated that he gets “greedy when others are fearful” and likes to buy stocks on sale when there’s a downturn, because then he gets the chance to earn greater returns when the price inevitably rebounds over time.

The bottom line is, it can be scary when an asset you own — or one that you believe has solid growth potential — starts to see a price decline. But, if you’re confident it’s a good long-term investment, as Cuban does with Bitcoin, you shouldn’t get scared of a downturn you believe is temporary. Instead, you should be grateful for the fact the asset is on sale and buy as much of it as you can to take advantage of the bargain.

This doesn’t necessarily mean everyone should start buying Bitcoin if the price plummets. You’ll need to do your own research on whether this or other cryptocurrencies are a good investment. But it does mean you shouldn’t always view downturns as a bad thing — even if you lose a little money on paper for a short period of time.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

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