Mark Cuban says it’s “the least important part of crypto” that investors need to focus on

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When considering any cryptocurrency investment, billionaire investor Mark Cuban looks for utility in every project.

That’s why, for him, “token trading is the least important part of crypto,” he tweeted on Tuesday.

Instead, Cuban views smart contracts, or the collections of code that power decentralized applications, and the way they are used in projects as the most important use case.

For example, smart contracts are essential for powering decentralized finance, or DeFi, applications and non-fungible tokens, or NFTs. In addition, they play a key role in the formation of decentralized autonomous organizations, or DAOs.

“Being able to build businesses on decentralized platforms by leveraging smart contracts, validators, DAOs and more creates a unique ability to deliver more efficient business processes and disrupt industries,” said the Shark Tank investor and owner of Dallas Mavericks.

This also applies to everyday investors and what to look for when considering investing in a crypto-related project, Cuban told CNBC Make It.

“Always seek utility,” he said. “This is where value is created.”

This is not surprising, as Cuban has repeatedly mentioned his belief in investments because of their usefulness, citing smart contract capabilities as an example. In the past, he’s even attributed this thinking to why he’s a “maxi Ethereum.”

“Smart contracts can change the world,” he previously told CNBC Make It.

Nonetheless, financial experts warn that cryptocurrency is a risky, volatile, and speculative investment. They warn to only invest what you can afford to lose.

Cuban is a keen investor in the space, with a cryptocurrency portfolio of various digital coins, NFTs, and investments in numerous blockchain companies.

Disclosure: CNBC owns the exclusive rights to the off-grid cable of “Shark Tank”.

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