World famous investment guru Warren Buffett, known in investing circles as the ”Oracle of Omaha”, has once again made his negative attitude regarding cryptocurrency known. At the annual meeting of Berkshire Hathaway – of which he is both CEO and chairman – this Saturday, Buffett resorted to colorful descriptions of exactly how bad he considers virtual currencies to be. This comes as other institutional actors are warming to cryptocurrencies and as Goldman Sachs has launched a dedicated Bitcoin trading desk.
Buffett’s aversion to cryptocurrency supposedly stems from his belief that virtual currencies cannot be classified as a ”productive asset”, as they are not like traditional corporate shares or like the ownership of land. He also clarified that he believes that the price of cryptocurrencies is therefore solely regulated through the demand of investors, which makes it a suitable means of payment for those Buffett refer to as ”charlatans”.
Moreover, Buffett went on to propose that cryptocurrencies will come to a ”bad ending”. Furthermore, he specifically called Bitcoin out and said that the currency could be likened to ”rat poison squared”. Buffett argued that investors could feel the burn of this once the current cryptocurrency craze wears off. What Buffett seems to disregard is the potential for the blockchain to dramatically improve how everything from logistics, security and democratic processes are handled. Furthermore, decentralized applications hold huge potential that could be likened to the introduction of mobile applications.
Nonetheless, Warren Buffett does not seem to be alone in holding this attitude, at least not at Berkshire Hathaway. The conglomerate’s Vice Chairman, Charlie Munger, was also decisively against cryptocurrencies at the annual meeting. He stated that ”someone else is trading turds and you decide I can’t be left out” in regards to virtual currencies. This is only the latest in a series of similar statements from Munger, who has previously suggested that he believes that people get involved in cryptocurrencies due to that ”everybody wants easy money”, and he also referred to Bitcoin as ”totally asinine”.
Buffett has also made several similar statements, making his position on cryptocurrency abundantly clear. He has previously stated that Bitcoin cannot be regarded as a way of investing – and similarly that it cannot be considered to be a currency. In October of 2017, he has also said that Bitcoin would ”implode” – after which it increased dramatically in price. It cannot be doubted, however, that 87-year-old Buffett has an impressive track record over the second half of the past century, and it remains to be seen whether he is correct in his predictions on Bitcoin and cryptocurrencies. This news came as the banking behemoth Goldman Sachs recently launched a special trading desk for Bitcoin, and commented that ”Bitcoin is not a fraud”.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.