In the world of investment and finance no one’s advice is as coveted as Warren Buffett’s. However, despite the Chairman and CEO of Berkshire Hathaway’s strong aversion to cryptocurrency, the market is still going strong. He recently reaffirmed his negative stance on the alternative currency market. But are cryptocurrency fanatics headed to likely doom as per Buffett’s advice?
According to Buffett, he’s never owned cryptocurrency and never will. His key argument is that “cryptocurrencies basically have no value and don’t produce anything.” In Buffett’s eyes, one is much better off investing in a productive asset that visibly and measurably produces units of service or goods over the years. In terms of Bitcoin, he likened the token’s usefulness to that of a button on his jacket that he could rip off and try sell at $1,000 initially before seeing if he could increase its value in another trade at $2,000 by the end of the day. An asset of zero value, so to speak. He’s gone as far as to call it “rat poison squared.”
In the many quotes that can be found of Buffett’s stance on Bitcoin and cryptocurrency online, Buffett’s stance is clear. He will not long or short something that he knows nothing about and would rather trade tulip bulbs than cryptocurrency. In his eyes, the cryptocurrency market is a futile one that will end badly for its fanatics whom he calls ‘charlatans.’ In his eyes “it’s something where people who are of less than stellar character see an opportunity to clip people who are trying to get rich because their neighbour’s getting rich buying this stuff that neither one of them understands.” In his defense, many crypto traders have little knowledge about inner workings of the coins and tokens that they are fanatically trading and pumping.
Having said the above, Buffett does recognize the idea of Bitcoin as ingenious and blockchain as “important.” But he maintains that is has no value other than people hoping that others will buy their crypto assets for a higher value they paid for, although their uses are almost meaningless to him. He’s been adamant that he cannot see a future for cryptocurrency extending beyond a few decades and that its end will bring misery to its current and defiant fans. He has also raised concerns about the illegal use of cryptocurrency to launder money as well as the fraud that runs rampant in the space - all for something that “produces nothing.”