Currently occupying sixth place on Forbes’ real-time billionaires list, Warren Buffett, co-founder, chairman and CEO of Berkshire Hathawayis a prime example of an investor who held on to his core financial beliefs from an early age to become not only successful, but a once-in-a-lifetime inspiration for those who followed in his footsteps.
One of the investors most listened to by the market for decades, Mr. Buffett, 93 years old, does not hesitate to pronounce on his investment philosophy, focused on value investingbuy shares for less than their intrinsic value and hold them for the long term.
He is also known for being very direct about investments he considers worthless. And one of them is Bitcoin.
Buffett’s Opinion on Bitcoin
Over the last decade, it has become clear that the cryptocurrency craze is not something Buffett wants to participate in. He described Bitcoin as “probably rat poison squared” in 2018.
“As for cryptocurrencies in generalI can say with almost certainty that they will have a disastrous end“Buffett said in 2018. And his stance has not changed since then. According to Benzinga, Buffett believes that cryptocurrencies are not a viable or valuable investment.
“Now, if you told me you owned all the Bitcoin in the world and offered it to me for $25, I wouldn’t take it because what would I do with it? I would have to sell it to you somehow. It’s not going to do anything,” Buffett said at Berkshire Hathaway’s annual shareholder meeting in 2022.
Is Buffett Wrong About Bitcoin?
Bitcoin proponents argue that, although not issued by the government, the cryptocurrency is as fungible, divisible, secure, and portable as fiat currency and gold. Because they occupy digital space, cryptocurrencies are decentralized, scarce, and durable. They can last as long as they can be stored.
Bitcoiners continue to predict massive growth in the currency’s value. Earlier this year, Anthony Scaramucci, founder of SkyBridge Capital and former White House communications director, told reporters that Bitcoin could surpass $170,000 by mid-2025, and Cathie WoodCEO of Ark Invest, predicts that Bitcoin will reach $1.48 million by 2030, according to Fortune.
“They don’t really understand the concept and the whole history of money” Scaramucci said of cryptocurrency critics like Buffett on a recent episode of Jason Raznick’s “The Raz Report.” Because we place value on “traditional” currency, it is essentially worthless compared to the transparent and trustworthy digital Bitcoin Scaramucci said.
Currently trading around $66,000, Bitcoin is up nearly 50% in 2024. This means it is far outperforming most indices this year, including the S&P 500, which is up about 6% in 2024.
Although Berkshire Hathaway has invested heavily in Nu Holdings, a Brazilian fintech company related to Bitcoin, which has its own cryptocurrency called Nucoin, Buffett may never go full crypto, despite its recent increase in value. ANDIt’s contrary to the reliable investment strategy that has served you well for decades.
“The impulse to participate in something where there seems to be easy money is a human instinct that has been released“Buffett said. “People love the idea of getting rich quick, and I don’t blame them… It’s so human, and once released it can’t be put back in the bottle.”
Source: Ambito
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