Bitcoin has gained acceptance in the world of traditional finance and investment in recent years, but the veteran billionaire Warren Buffett He remains skeptical about the most prominent cryptocurrency.
Buffett said at the annual meeting of shareholders in Berkshire Hathaway on Saturday, that Bitcoin “is not originally a product nor does it produce anything tangible.” Despite a shift in public perception about cryptocurrency, Buffett remains reluctant to buy it.
Even Bitcoin enthusiasts tend to view the cryptocurrency as a passive asset that investors buy and hold, hoping to see an increase in price over an extended period. Buffett commented, “No one is betting on Bitcoin in the short term, everyone is holding it for the long term.”
For the more sophisticated cryptocurrency investors, some cryptocurrencies offer a way to use them productively – either through lending or as collateral – to create additional wallet benefits. However, these coins are still small, highly speculative and have not broken the mainstream like Bitcoin.
Buffett explained why he didn’t see value in bitcoin, comparing it to things that generate other types of value.
And he said, “If you say… to get 1% interest in all farmland in the United States, pay $25 billion to our group, I’ll write you a check this afternoon. For $25 billion I now own 1% of farmland. If you give me 1 % of all residential homes in the country want another 25 billion dollars, I will write you a check, it’s very simple. Now if you tell me you own all the bitcoins in the world and offer them to me for 25 dollars, I will not receive them.. What am I going to do with them? I will have to sell them back to you One way or another. You won’t do anything. The apartments will generate rent and the farms will produce food,” according to CNBC.
Investors have for years been at a loss as to how to value bitcoin in part because of its ability to serve different functions. In western markets, it has been established as an investment asset, particularly in the past year when inflation rates have been on the rise. In other markets, people still see huge potential for use as digital cash.
Buffett continued, “Assets, to have value, have to give something to someone. There’s only one acceptable coin. You can come up with all sorts of things – we can put up Berkshire coins…but in the end, that’s money,” he said, holding A 20 dollar bill.
He added, “There is no reason in the world for the United States government … to allow Berkshire’s money to replace its money.”
In the past, both Buffett and billionaire Charlie Munger have made hostile comments toward Bitcoin. “In my life, I’ve tried to avoid stupid and evil things that make me look bad compared to someone else,” Munger said. “Bitcoin does all three.”
“First of all, it’s stupid because it could potentially go to zero. It’s evil because it undermines the Federal Reserve system. And third, it makes us look fools compared to the communist leader in China. He was smart enough to ban Bitcoin in China.”