Mark Cuban sees similarities between stocks and Bitcoin and envisions a DeFi future

Bitcoin could continue to rise, as could stocks in general, in an environment of no interest rate hikes. The decentralized finance sector could change the way the cryptocurrency market operates. These statements were made by billionaire Mark Cuban in an interview Forbes.

A former Bitcoin critic, who preferred bananas to the first cryptocurrency, urged participants in the crypto market to monitor the dynamics of interest rates.

“All discussions about debt will have real footing if interest rates rise, and by how much. That is when we will see how this affects prices for all assets. Bitcoin is akin to any stock. Its price is determined by supply and demand,” he said.

According to Cuban, institutional investors are currently pushing up the price of cryptocurrencies. He believes that in the short term the $1.9 trillion stimulus package proposed by the president-elect Joe Biden and the continuation of the Federal Reserve’s asset purchase program will not have a significantly negative impact on the Bitcoin price.

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On January 14, Fed chair Jerome Powell eased concerns of imminent tightening of monetary policy. He pledged to maintain near-zero rates until inflation sustainably reaches the 2% target.

Cuban sees revolutionary potential in decentralized finance.

“I am convinced that DeFi can change [what drives Bitcoin] in various ways. However, it is still too early for it to have a significant impact,” he explained.

Earlier this year, the amount of assets locked in DeFi protocols exceeded $20 billion. According to DeFi Pulse, as of today the figure had approached $25 billion.

According to CoinGecko, in 2020, portfolios holding DeFi protocol tokens gained an average of 718%.

2020 in numbers: Bitcoin records, DeFi boom and institutional adoption

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