Warren Buffet the investment guru stays unsold on cryptocurrencies and on bitcoin, he thinks that buying bitcoin is not any kind of investment but is a type of betting.
In the interview at Berkshire Hathaway’s annual shareholder meeting, he clarified his doubt regarding bitcoin in an interview with Yahoo Finance. He said that in the market there are two types of objects that the public buys and think that they are investing and from that one is truly investing but the other is not and Bitcoin is not investing.
Why Buying Bitcoin Isn’t Really Investing
Buffet said that certain things can be done on a private basis such as buying a farm, an apartment house or an interest in a business and all such businesses are certainly a pleasing investment. The investment itself is observed as to give you some kind of return. And as such if you are buying bitcoin or some cryptocurrency, then you will not give you any type of return.
You simply believe that the other person will pay more. So as per Buffet, this is speculating and not investing. He said that there is not anything wrong in speculating and rather it is like gambling. And in case of gambling, the other person may pay more the other day. So this is not investing, but gambling.
A Longtime Bitcoin Skeptic
Buffet, before many years, called cryptocurrency a mirage and said that it was funny to allocate a value to something for the reason that it is used to transfer money. He questioned that as the checks are used to transfer money, are they equal to that total amount?
Buffet restated his skepticism regarding cryptocurrency after Morgan regretted his calling bitcoin a fraud.
Buffet said that he was very sure that cryptocurrencies will have a bad ending and he can even bet on each cryptocurrencies in the succeeding five years. He further said he does not find any reason to deal with bitcoin future contracts and take an adverse position. He remarked that he has very little knowledge about cryptocurrencies.
In October, he advised that as bitcoin is not a value-producing asset, you cannot value it. He also questioned strategists and hedge fund managers who consider that Metcalfe’s law gives an effective metric to decode bitcoin’s value.
Not Impressed By ICOs
Buffet presented his concern that ICOs that rose beyond $3.2 billion in the year 2017 alone as per ICO tracker CoinSchedule may not be advantageous to the investment industry. People are thrilled with huge price movements and Wall Street accommodates.
Zhao Changpeng, Binance CEO commented that Warren Buffet has no knowledge regarding cryptocurrency. And he added that from the investment point of view, he really admires Warren Buffet, but according to him Buffet does not understand cryptocurrencies.
Changpeng said that he respects Buffet for his proficiency in other fields, but regarding cryptocurrencies, he is having a great mistake.