When Warren Buffett speaks, the world listens – not just investors looking for stock tips. In fact, the billionaire’s advice on what not to do is often just as, if not more, noteworthy.
Reason #1: It’s a Mirage
When asked for his thoughts on Bitcoin, Buffett advised investors to stay away. “Well, it’s a mirage, basically,” he remarked. His argument? The cryptocurrency has no intrinsic value beyond the service it offers. Unlike stocks, which generate cash to be invested into products and sold in return for profits, bitcoins don’t really generate anything.
Reason #2: It’s a Method of Transmitting Money
As a way of transferring funds and transmitting money, Bitcoin has its advantages – it is entirely anonymous, and the coins are relatively fast to create. But Buffett compares them to checks and money orders, also ways of transmitting money with prices that aren’t as high (consider that a single bitcoin is currently priced at upwards of $600). “It’s dollars on both ends,” Buffett remarked.
Reason #3: It’s Not a Currency
This isn’t the first time Warren Buffett has voiced his opinion about Bitcoin. Earlier this month in yet another CNBC appearance, the billionaire declared, “It’s not a currency.”
In the interview, Warren Buffett said he doesn’t consider Bitcoins to be an actual currency that can be used like the U.S dollar, even more so because it is linked to it. He went so far as to say that he doesn’t see the cryptocurrency making it over the next 10, 20 years. The value of assets and the profits to make off of them will be much higher than owning something without value beyond the market’s price.
Warren Buffett Not Alone in Skepticism
Warren Buffett’s opinions are in line with a number of government agencies and other regulatory bodies that are concerned with Bitcoin’s handling and growth. Some countries have placed restrictions on the cryptocurrency and forbidden its use, though many merchants are still opting to accept Bitcoin-based payments. Will the Oracle of Omaha be right on this one? We’ll have to wait to find out.
To learn more about Warren Buffett, visit his iBillionaire profile.