For many, cryptocurrencies have become an investment well worth the risk, but for many others they are something to vehemently rail against. Try posting something on Facebook about crypto and see if you don’t get lovers and haters instantly weighing in.
One of the most prominent members of the “rail against” group is CEO of Berkshire Hathaway, Warren Buffett.
Buffett, while widely respected for his shrewd investment foresight, is not a fan of cryptocurrency and warns potential investors he thinks, “almost with certainty they [cryptocurrency] will come to a bad ending.”
Buffett went on to state to CNBC, that he didn’t really understand how Bitcoin operated but he would never “have a position in them.”
Will Buffett’s word have an impact on cryptocurrencies like Bitcoin? Surprisingly, Buffett’s words have had little effect (so far) on Bitcoin’s value.
Remember a few months ago when Buffett bought Synchrony? The lesser-known stock seemed to take off overnight after Buffett/Berkshire Hathaway’s investment, leading us to believe than many powerful investors take heed of Buffett’s business acumen, which could potentially impact how other investors feel about cryptocurrencies overall.
Buffett told the Washington Post, “there are basically two kinds of assets: one you look to the stream of income it will produce and the other you hope like hell that someone will pay you more for it.” The second type would most definitely include Bitcoin.
Buffett contends that since cryptocurrencies are backed by computer power instead of a national bank, they are unreliable and fluctuate too much to be trusted.
There is no doubt that Buffett is the go-to man for investments, but how can you repudiate Bitcoin and other cryptocurrencies worth if you admittedly do not understand how they work? If you don’t understand how they work, how could you possibly appreciate their value?
I’m not sure if this was meant to be a sarcastic statement on Buffett’s part, or if he genuinely doesn’t understand how they work, but still dislikes them. Back in 2014, Buffett told investors that it was nothing more than a “mirage” and that investors should “stay away from it.”
There’s no doubt, the man is a genius in the business sphere, but is he right about cryptocurrencies?