What does warren buffett say about cryptocurrency

what does warren buffett say about cryptocurrency

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His concern is that without any underlying utility of their own, the investment can only increase in value if someone else happens to believe it’s worth more. “They don’t reproduce, they can’t mail you a check, they can’t do anything, and what you hope is that somebody else comes along and pays you more money for them later on, but then that person’s got the problem.”

Buffett has also indicated he personally doesn’t like cryptocurrency because the investments are difficult to understand.

What does warren buffett say about cryptocurrency

You can entrust the management and custody of the digital asset to fund managers for a minimal fee.

Hotter than BTC

If you desire a more secure option to gain access to bitcoin, consider Hut 8 Mining (TSXV:HUT). The crypto stock outperforms BTC. The current share price of $10.57 is 1,477.6% higher than it was a year ago.

Had you invested $2,000 then, your money would be worth $31,552.24 today.

The Toronto-based company’s market capitalization is $1.16 billion, and it engages in industrial-scale Bitcoin mining operations. It owns and operates the 56 BlockBox and 38 BlockBox AC data centres in Medicine Hat and Drumheller, Alberta.

Hut 8 holds more self-mined Bitcoin than any other publicly traded Bitcoin miner in the world.

As of February 17, 2021, the balance sheet shows 3,012 in Bitcoin holdings.

What does warren buffett say about crypto

Lee said, “I don’t know if history will repeat itself, but what we do know is that Bitcoin bull-market cycles come every four years, and this is a big one.”

Bitcoin in the mainstream

If you recall, after 2017, Bitcoin plunged below US$4,000 from $20,000 in a little over a year. Critics say it could happen again if institutional adoption is limited or weak.
Three Bitcoin exchange-traded funds (ETFs), Purpose Bitcoin ETF, Evolve Bitcoin, and CI Galaxy Bitcoin ETF trade on the TSX.

Investors have a way now to invest in Bitcoin without actually holding the token.

What does warren buffett think about bitcoin

Warren Buffet’s Berkshire Hathaway has made a $500 million investment in the parent company of the privately-held digital bank Nubank, which has been offering cryptocurrency investment products to its users.

According to CNBC, Nubank is a private bank based in Brazil that was founded in 2013, and has roughly 40 million customers. The company’s CEO has revealed an initial public offering is currently being planned, but is a likely possibility in the future.

The $500 million investment is notable, as Buffett is a well-known bitcoin critic, who has in the past called the cryptocurrency a “gambling device” and argued they are worthless because they don’t produce anything.
The investor has made a similar case against gold.

The digital bank notably acquired Easynvest, a digital investment platform, late last year.

What does warren buffett think about cryptocurrency

American billionaire Warren Buffett makes headline news every time he buys or sells stocks. Berkshire Hathaway ditched and trimmed its positions in some stocks while adding or taking new positions in Q4 2020. The moves indicate the Berkshire CEO looks to maximize every dollar he invests.

In the cryptocurrency market, Bitcoin (BTC) continues to skyrocket in 2021.

The world’s most popular digital currency has breached the US$60,000 mark. On March 13, 2021, BTC finished at US$61,243.09, or a 529.2% year-over-year increase.

Despite the price going through the roof, Buffett has not touched the cryptocurrency.

A delusion

In his most recent letter to Berkshire shareholders, the GOAT of investing never mentioned cryptocurrencies. Avid crypto supporters don’t like him much because he’s a vocal critic.

What did warren buffett say about cryptocurrency

The investment may not have been made because Nubank is crypto-friendly, but rather despite that fact.

With little indication the Oracle of Omaha has actually altered his stance on crypto assets, it’s likely that Buffett’s firm position that cryptocurrencies have little actual utility remains unchanged and serves as solid justification for avoiding this asset class.

For those who want to invest like Buffett, it’s best to purchase investments that have a proven track record, that you’d be happy to hold for decades, and that you understand deeply.

What does warren buffett say about bitcoin

The platform allows anyone to invest without paying commissions, and offers its users access to bitcoin exchange-traded funds and products, including 3iQ’s QBTC bitcoin investment product.

Clarification: Nubank’s acquisition of Easynvest will allow for investment in Bitcoin via bitcoin ETFs

— Blockworks (@Blockworks_) June 8, 2021

Berkshire Hathaway has notably made significant investments in financial firms in the past, with traditional banks and insurance firms making up a large portion of its portfolio. In the first quarter of the year, however, Buffett had sold nearly all of his stake in Wells Fargo.

Last year the ‘Oracle of Omaha’ had also invested in gold mining firm Barrick Gold, but seemingly sold his stake in it a few months later.
To the investor gold and bitcoin are non-productive assets, unlike businesses or farms.

What does warren buffet say about crypto currency

Munger said he doesn’t “welcome a currency that’s so useful to kidnappers and extortionists,” and went on to describe the development of cryptocurrency as “disgusting and contrary to the interests of civilization.”

These comments are a markedly different take on virtual coin compared with other celebrity investors and entrepreneurs, including billionaires Mark Cuban and Elon Musk, both of whom have embraced crypto publicly many times.

Why does Buffett not like crypto?

Why is Buffett so anti-crypto? There are two big reasons why the billionaire investor won’t put virtual currencies in his portfolio.

We’ve found one company that’s positioned itself perfectly as a long-term picks-and-shovels solution for the broader crypto market — Bitcoin, Dogecoin, and all the others.

What did warren buffett say about crypto

In fact, he’s stated clearly that virtual coins “can’t do anything,” and aren’t currently viable as a payment method.

Because the coins don’t have any underlying real value of their own, the only way investors can profit is if people in the future decide to pay more for the virtual currency than those currently holding it.

2. Bitcoin is as a mirage that doesn’t have the basic qualifications to be considered a currency

Buffett believes a viable currency must be a store of value and a durable means of exchange.

Cryptocurrencies are lacking these fundamental traits, which is why he believes Bitcoin is nothing more than a mirage.

While Buffett acknowledges that Bitcoin can be used as a means of transmitting money, he also points out that a simple check can do the same.

What warren buffett say about bitcoin

Buffett thinks of buying this asset class.

Heeding his words can help you make a more informed choice about whether virtual currencies should have a place in your portfolio.

What Warren Buffett thinks of cryptocurrency investing

If you were hoping the Oracle of Omaha would be an enthusiastic supporter of cryptocurrencies, you’re probably going to be disappointed.

Buffett once referred to Bitcoin as “rat poison squared.” He made this statement even though this established virtual currency is favored by many other prominent investors, and is widely viewed to be one of the safer cryptocurrencies to invest in because it is accepted by more merchants than many others.

Buffett has also made clear his reasons for not liking cryptocurrencies.

Buffett describes Bitcoin — or cryptocurrencies in general — as a worthless and risky, speculative asset. He told CNBC in February 2019, “It’s basically a delusion.”

Alarming bull market cycle

According to BTCC exchange founder Bobby Lee, this year is a bull market for Bitcoin.

He predicts the price will hit US$100,000 by summer and close the year at US$300,000. Lee warns, however, that Bitcoin could face a winter that could drag for years.

The price could fall as much as 90% from its peak.

Other BTC advocates believe the remarkable run will continue as more institutional investors buy the cryptocurrency. They argue further that it could act as a hedge against inflation should it rise soon.

Buffett has spread his money around a diverse array of different assets, but there’s one type of investment he’s made clear he wouldn’t touch: cryptocurrency.

As a growing number of Americans buy virtual currencies, it’s worth taking a look at exactly what the Oracle of Omaha objects to about this asset class.

What has Buffett said about cryptocurrency?

Buffett has pulled no punches when it comes to sharing his distaste for crypto. In fact, when asked about one of the more popular virtual currencies — Bitcoin — Buffett’s comment was that it was “probably rat poison squared.”

Buffett declined to comment on cryptocurrency recently during his company, Berkshire Hathaway’s annual shareholders meeting.

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