You’ve undoubtedly heard about one of the main Bitcoin antagonizers — Warren Buffett, the one who calls the first cryptocurrency a financial bubble and a rat poison squared. We’re gonna discuss what Buffett does not like about Bitcoin.
Who is Buffett
Okay, let’s actually answer why is it that everyone pays attention to what Warren Buffett says? Because he is a legendary investor and one of the richest people in the world. Buffett's fortune is estimated to be $84.4B.
Warren was born in 1930, and his first investment was made when he was 11 years old. He bought three stocks for $38 each, and sometime later, he sold it for $40 each. Because of the fees, he made a profit of $5. But then, the price of these stocks rose up to $200 each, and that’s when Buffett wasted an opportunity to make $500. Since then, he took it as a rule to always be patient and never sell for the short-run reward.
In 1962, Warren Buffet bought and took lead of Berkshire Hathaway company, which was on the brink of the bankruptcy. Today, it’s the third largest public company in the world, with a market capitalization of $487M.
Criticizing Bitcoin
The Investment interests of Buffett affect virtually all sectors of economy, but he flatly refuses to enter the cryptocurrency market. When asked about Bitcoin, Warren says the following:
“If you purchase something like Bitcoin or other cryptocurrency, then you don’t really have something that could produce on its own. You simply hope that the next guy will pay more”.
As for Bitcoin, Warren Buffett calls it a financial bubble and a rat poison square two, as well as predicting a tragic fate for the market:
“Regarding all cryptocurrencies, I can say that almost undoubtedly they will reach a bad end. When and how will it happen, I don’t know”.
In addition to these words, Buffett says he will never invest in cryptocurrencies.
Buffet, you are wrong
What to do when a legendary investor flat out refuses Bitcoin? It’s all simple, really: Warren Buffett does not understand the technology behind cryptocurrencies, and per his old habit, he refuses everything he doesn’t understand.
And that’s all coming from Changpeng Zhao, the CEO of Binance, one of the largest cryptocurrency exchanges:
“I still respect the other parts of Warren Buffett expertise, but I think on cryptocurrency he’s making a big mistake.”
Another one who took a stand for Bitcoin was an ex-vice-president of Facebook, a venture capitalist — Chamath Palihapitiya:
“Not everybody is right all the time. We have to acknowledge that we all have biases. Look, I'm a disciple of Buffet and one of the things he has said for years is you define your circle of competence and you stay within it. I think it's been clear his entire investment career that technology is not in his circle of competence”
There are many similar feedbacks resembling this stance. But the best evidence was provided by Buffet himself. He admitted he never bought Amazon stocks because he couldn’t realize sooner the potential of the company. All in all, Amazon is the biggest retail business in the world now. This speaks so much about how Buffett may be wrong in relation to cryptocurrencies and blockchain.