Will Bitcoin be minted by more millionaires or is it just a “dead cat jump”? Here are 3 Reasons Warren Buffett Says Cryptocurrency Will ‘Go to a Very Bad End’

Will Bitcoin be minted by more millionaires or is it just a

Will Bitcoin be minted by more millionaires or is it just a “dead cat jump”? Here are 3 Reasons Warren Buffett Says Cryptocurrency Will ‘Go to a Very Bad End’

It has been a tough year for Bitcoin and its supporters. Back in 2018, the Oracle of Omaha himself predicted that he and other cryptocurrencies were in trouble.

“They will come to a very bad end,” Warren Buffett told CNBC at the time.

After hitting an all-time high of around $69,000 per unit on November 10, 2021, the world’s leading digital currency has since erased roughly 67% of its value, now standing at around $23,000.

To be sure, bitcoin has risen in recent weeks, increasing by almost 40% in 2023.

But what would the world’s most famous investor say to those who might be thinking about buying bitcoin right now?

“If you… owned all the bitcoins in the world and offered them to me for $25, I wouldn’t take them,” Buffett told CNBC earlier this year.

Beyond Bitcoin’s disappointing track record, there are three other reasons why Buffett won’t go for it.

Do not miss

1. It “has no unique value at all”

The billionaire investor does not like Bitcoin because he considers it an unproductive asset.

Buffett has been known to favor corporate stocks whose value and cash flow are tied to making things. But cryptocurrencies have no real value, Buffett said. CNBC interview in 2020.

“They don’t breed, they can’t send you a check, they can’t do anything, and you’re hoping someone else will come along and pay you more money for them later, but then that person has a problem. “.

Although bitcoin is designed to provide real value as a payment system, its use is still fairly limited. According to Buffett, the value of Bitcoin comes from the optimism that someone else will be willing to pay more for it than you are paying today.

2. He doesn’t think cryptocurrency counts as money

Over the years, Buffett has made quite a few scathing remarks about bitcoin and cryptocurrencies: “I don’t have bitcoins. I don’t have cryptocurrency and never will,” he said. CNBC back in 2020.

As a tradable asset, Bitcoin flourished. But does it meet the three criteria of money? According to the most common definition, money should be a medium of exchange, a store of value, and a unit of account.

Read more: Top 10 Investment Apps for Once in a Generation Opportunities (Even If You’re New)

But Buffett calls it a “mirage.”

“He does not meet the requirements of the currency,” the billionaire said on CNBC in 2014. “It’s not a durable medium of exchange, it’s not a store of value.”

He adds that this is a very effective way to transfer money anonymously. But: “A check is also a way to transfer money,” he said. “Are checks worth a lot of money just because they can transfer money?”

3. He doesn’t get it

Buffett has become one of the most successful investors in history by settling on stocks he understands.

“I have enough problems with things that I think I know something about. Why on earth should I go long or short something I don’t know anything about?”

But people love to gamble, he said. CNBC after Berkshire Hathaway’s 2018 annual meeting, which is another problem with non-productive assets.

“If you don’t understand it, you get much more excited than if you understood it. You can get anything you want if you just look at something and say, “It’s magic.”

As does Buffett Picking Winning Stocks?

The billionaire investor pursues a value investing strategy that focuses on buying undervalued stocks of strong companies and holding them for the long haul.

Simple, right?

Berkshire Hathaway is looking for companies with good margins and those that produce unique products that cannot be easily replaced. As Warren Buffett once said in a letter to his shareholders, “It’s far better to buy a great company at a fair price than an honest company at a great price.”

But Buffett’s dislike of crypto stocks doesn’t necessarily mean you shouldn’t buy bitcoin. Even the billionaire came to his senses in those sectors that he had previously opposed.

He famously avoided tech stocks even during the height of the dot-com bubble, and now his company’s largest holding is Apple.

What to read next

This article provides information only and should not be construed as advice. It is provided without any warranty.

Content Source

News Press Ohio – Latest News:
Columbus Local News || Cleveland Local News || Ohio State News || National News || Money and Economy News || Entertainment News || Tech News || Environment News

Related Articles

Back to top button