Advertisement

kyberswap banner

Advertisement

Home bitcoin

Buffet continues to show his ignorance of Bitcoin

Buffet continues to show his ignorance of Bitcoin

At the Berkshire Hathaway Annual Shareholder meeting on Saturday, Warren Buffet expanded on why he thinks bitcoin is worth nothing. 

“If you offered me all the bitcoin in the world for $25 I wouldn’t take it,”

Warren Buffet’s famous views on bitcoin have not changed at all. He and his number 2 Charlie Munger have maligned bitcoin at every opportunity, and have compared it to “rat poison” for its perceived effect on investors who buy it.

At the annual shareholder meeting on Saturday Buffet reiterated that bitcoin was “not a productive asset”, and that it “doesn’t produce anything tangible”. 

CNBC live-streamed the event, and updates were added to its coverage as several hours of the meeting plus Q&A progressed. At one point Buffet explained why he wouldn’t buy bitcoin, saying:

“Whether it goes up or down in the next year, or five or 10 years, I don’t know. But the one thing I’m pretty sure of is that it doesn’t produce anything,”

He added:

“Assets, to have value, have to deliver something to somebody. And there’s only one currency that’s accepted. You can come up with all kinds of things. We can put up Berkshire coins, put up Berkshire money but in the end, this is money,” he said, holding up a $20 bill. “And there’s no reason in the world why the United States government … is going to let Berkshire money replace theirs.”

Buffet went on to say how bitcoin has “no tangible value”, a constantly recurring theme for the Berkshire Hathaway CEO. He underlines how other assets such as farmland, real estate, and art, have tangible value.

According to Buffet, it seems that if you can’t actually touch something, then it has no value, and that is where his assumptions fall over. He doesn’t appear to be able to take in anything along the line of digital assets that exist in an online ledger, but which you can’t physically touch. It seems an almost infantile approach to the subject, but when you consider that Buffet has generally been wrong, or at least extremely late on tech stocks, then you begin to have some idea of how his mind works.

Another of his attitudes that seems extremely mistaken, is his faith in the US dollar. There aren’t many, outside of the traditional banking system, who would dream of backing the dollar, or any other fiat currency for that matter, against their perpetual slide towards an eventual value of zero.

Yes, at this point in time, bitcoin is a speculative asset, and it could be argued that it may not end up being used as a form of currency. However, its one crowning utility is that it is a store of value, recognised across the world, with more scarcity than even gold. With such an asset at the reach of the common investor, it’s very wrong of Buffet and Munger to extol the virtues of fiat currency at the expense of the sound money which is bitcoin.

Neither Buffet nor Munger look like evil people. They both look as though they could be someone’s grandad, and appear to at least have their shareholders interests at heart. But the rather unpalatable fact remains that both are blind to progress. Given their extraordinary success in stocks and shares generally, we must put it down to this, rather than an absurd belief in the financial system as it is.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Advertisement

Advertisement