Billionaire investing icon Warren Buffett is bearish on cryptocurrency in all its forms. He argues that the bitcoin price is a “real bubble”, and he is not optimistic about the potential of initial coin offerings, either.
Warren Buffett: Bitcoin Price a ‘Real Bubble’
As reported in MarketWatch, the Berkshire Hathaway CEO — known as the “Oracle of Omaha” — made these comments earlier this month during an “Ask Me Anything”-style question-and-answer session with business students. At least one student asked Buffett about cryptocurrency, and — unsurprisingly — he replied that he is not enthused about bitcoin or other digital currencies.
“You can’t value bitcoin because it’s not a value-producing asset,” he warned, casting shade on strategists and hedge fund managers who believe Metcalfe’s law — a principle that states the value of a network is proportional to the square of the number of its user base — provides an effective metric for deciphering bitcoin’s value.
There’s a “real bubble in that sort of thing,” he added, echoing comments made by UBS earlier this month.
Not Impressed by ICO Hype
Buffett also reportedly addressed the growing hype over initial coin offerings (ICOs), fundraising events through which blockchain startups can crowdfund projects by selling their users crypto tokens that could represent any number of things, ranging from access to a product or service to an entitlement to a percentage of a platform’s profits.
He expressed concern that ICOs — which have raised more than $3.2 billion in 2017 alone according to ICO tracker CoinSchedule — will not prove beneficial to the investment industry. “People get excited from big price movements, and Wall Street accommodates,” he commented.
This skeptical stance on cryptocurrency is consistent with past statements Buffett has made about bitcoin. Several years ago, he called it a “mirage”, arguing that it was a “joke” to assign a value to something just because it can be used to transmit money. “Are checks worth a whole lot of money just because they can transmit money?,” he asked at the time.
Clearly, Buffett is not acquainted with how bitcoin works — much less the concept of “fat protocols” — but then again, he didn’t turn Berkshire Hathaway into a $465 billion empire by positioning himself at the forefront of technological innovation. Indeed, Berkshire Hathaway’s website has undergone virtually no modifications since the year 2000.
CLAIM IN AUTOMATION
automated 24/7 freebitcoin
buy your first bitcoin
exchange your coins
Support the community