CRYPTOCURRENCIES
Mark Cuban Backs Cryptocurrency Fund After Saying Bitcoin Is a Bubble
Lucinda Shen
5:14 PM ET
Billionaire investor and Bitcoin doubter Mark Cuban is coming around on cryptocurrency.
Despite saying Bitcoin was a bubble in early June, Cuban has backed venture capital firm 1confirmation, according to Bloomberg. The firm not only has plans to invest some $20 million in companies developing blockchain technologies, but it also wants to invest in early stage companies before they head into an initial coin offering (ICO)—a fundraising effort in which the offering company issues tokens rather than ownership stakes.
Founded by Runa Capital principal Nick Tomaino, 1confirmation hopes an early stage investment in a promising albeit unproven company could lead to a discounted token price once young company holds an ICO, according to Bloomberg.
1confirmation also hinted that it hopes to add value to the companies it invests in to bump up its ICO pricing.
It's not the first time Cuban has gotten involved in an ICO. Cuban also plans on participating in a fundraising round of sports-betting blockchain platform Unikrn, meaning his latest investment could result in him indirectly owning more than one kind of cryptocurrency.
Read: 5 Ways Businesses Are Already Using Blockchains
ICOs have caught fire recently, at least among investors like Cuban. One major selling point is that while traditional methods of investing in a young company usually means holding onto the stake for a long period of time, tokens are far more liquid. If an investor wants out of a company, they can usually trade the company's coins for Bitcoin of Ether, which can in turn be traded for fiat currency, according to the Harvard Business Review.
Meanwhile, cryptocurrencies have surged in recent months, with Wall Street consistently raising Bitcoin's value higher and higher.
This is part of Fortune’s new initiative, The Ledger, a trusted news source at the intersection of tech and finance.