Warren Buffett doesn’t like Bitcoin. He confirmed this once again during the annual meeting held with Berkshire Hathaway shareholders, where the 91-year-old billionaire answered questions from the audience. In his opinion, cryptocurrency is not a productive commodity and does not involve anything tangible, but it is just magic to which people have attached many things.
According to the Oracle of Omaha, everyone is holding Bitcoin in hopes of seeing a long-term price increase, but what does this asset ultimately produce? Buffett draws a comparison with tangible assets, such as condos and farms. If purchased, these produce rent and food, but if you buy Bitcoin, you should sell it because it generates nothing. So the great financial mentor reiterates that he would not buy the digital currency even if offered all the tokens in the world for 25 dollars.
Bitcoin: for Buffett, it cannot replace fiat money
However, Bitcoin has acquired increasing value over the years as an investment and payment instrument. In the first case, more and more institutional investors have included it in their portfolio choices, and now some funds, such as Fidelity, have also come forward which plans to offer Bitcoin in 401 (k) pension plans. In the second case, many commercial realities have accepted it to regulate exchanges. A sovereign state like El Salvador has baptized it as a legal currency.
However, Buffett remains perplexed and argues that for an asset to fly, it must deliver something to someone. Anyone could invent a coin, even Berkshire, but there’s no reason why the US government would let private company money replace official money.
After all, Buffett’s position on Bitcoin is not new. In the past, the king of value investing has repeatedly stepped on the leading cryptocurrency, calling it rat poison squared. The comments of business partner Charlie Munger, who has always been extremely hostile to Bitcoin, also added to the dose. The 98-year-old from Omaha said this virtual currency is useless, evil and makes you feel silly. It’s silly because it’s still likely it’s going to go to zero. It is evil as it undermines the Federal Reserve‘s monetary system. And it feels silly compared to China, which was smart enough to ban it in the territory entirely.