Ethereum ( ETH 4.05% ) has been a success story no matter how you look at it. Its native Ether token now ranks as the second-biggest cryptocurrency based on market cap, behind only Bitcoin ( BTC 0.71% ). Since the second half of 2015, Ethereum has delivered a gain of nearly 310,000%.
What’s potentially in store for the cryptocurrency in the new year? Here’s why one famous billionaire thinks Ethereum could be a monster winner in 2022.
A maverick bringing crypto into the mainstream
Mark Cuban is probably best known for three things. He’s one of the richest people in the world, with an estimated net worth of around $4.5 billion. Cuban bought the Dallas Mavericks professional basketball team in 2000. He is also seen weekly on the long-running TV program Shark Tank.
But the wealthy maverick is also gaining attention these days as a vocal proponent of blockchain and cryptocurrencies. He thinks that where blockchain technology is today is similar to the early stages of the internet.
Cuban is putting his money where his mouth is. He bought some Bitcoin years ago and has held on to his stake. The entrepreneur revealed earlier this year that his cryptocurrency portfolio consists of “60% Bitcoin, 30% Ethereum, and 10% the rest.” Cuban bought a small amount of Dogecoin earlier this year as a “fun and educational” experience for his 11-year-old son.
The billionaire has also invested in several blockchain companies. These include dClimate, the first decentralized blockchain network for climate data, and Blocto, which offers a crypto wallet and nonfungible token (NFT) marketplace.
Why Cuban likes Ethereum
Although Cuban owns more Bitcoin than Ethereum, he stated in October that “Ethereum has the most upside” for cryptocurrency investors. And he thinks 2022 could be a big year for Ethereum.
Cuban is a huge fan of smart contracts — agreements stored on the blockchain. These smart contracts are critical for decentralized finance (DeFi) apps and NFTs. His bullish view about Ethereum is primarily due to the blockchain’s smart contract capabilities.
The billionaire expects that new smart contract apps will be introduced in the new year that make Ethereum more valuable than ever. In particular, Cuban is enthusiastic about the opportunity for the blockchain to monetize carbon offsets. Carbon offsets allow organizations or individuals to pay another entity to reduce carbon emissions by a specified amount.
Cuban thinks blockchain is the ideal way to monetize these carbon offsets. He’s already promoting the idea within the companies he owns.
Follow the shark?
Should you buy Ethereum just because the Shark Tank star is bullish about it? No. Like any investor, Cuban has made his fair share of bad calls in the past.
However, he’s almost certainly right that smart contracts will enjoy increasing adoption in the coming years. His support for Ethereum as a key player in making this happen also seems to be justified. With a major upgrade to Ethereum on the way that makes its blockchain faster and lowers transaction fees, the platform could be even better positioned to support the new apps that Cuban envisions.
There’s no guarantee that Ethereum will be a monster winner in 2022. But don’t be surprised if it is. One famous billionaire certainly won’t be.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.