The Bitcoin price isn’t doing as well as we anticipated moving through the weekend, falling back to $9300 after reaching close to $10000 – and Warren Buffett and Bill Gates are not fans of the investment opportunity.
By design, Bitcoin price and other cryptocurrencies like it are very difficult to anticipate in terms of value. With a price determined entirely off of speculation rather than being tied to real-world statistics like a company’s performance, it becomes clear why the price has been all over the place over the last few years. Bill Gates and Warren Buffett have taken turns criticizing the currency over the past few days – with their negative opinions perhaps part of the reason for the recent downturn in value.
According to Bill Gates, “[he] would short it if there was an easy way to do it…” providing one of the most bearish statements we’ve seen from the Microsoft founder and Berkshire directors thus far.
Bill Gates has also been known for cooperating with the government in defense matters, with many criticizing him for his apparent lack of care when protecting the privacy of customer data when compelled by the legislature for information. His concerns regarding Bitcoin price also stem from a security standpoint with concerns that the anonymity and lack of traceability of the currency may contribute to funding illegal activities – stating it has “caused deaths in a fairly direct way.”
Bill Gates clarified his statement, explaining that although the blockchain technology being behind Bitcoin price are being used in other industries such as diamond-tracking and pig-tracking, “[Initial Coin Offerings] and Bitcoin are not producing anything, it’s kind of a pure greater-fool-theory type investment.”
The interview with Bill Gates comes after a Berkshire Hathaway Annual Shareholder Meeting on Saturday in which Buffett also criticized Bitcoin, calling it “rat poison squared.” Buffett has also previously stated that he will never buy cryptocurrencies, citing a lack of understanding of the asset as well as a distaste for the volatility.
Warren Buffett is an incredibly capable investor, but it’s important to take his criticism with a grain of salt – considering the fact that the investment mogul has previously rebuffed Internet and technology companies due to a lack of understanding of the companies.
However, considering that Berkshire Hathaway’s largest holding at this point is Apple who are largely known for their successful smartphones, Buffett admitted that he made the wrong decision regarding companies like Amazon and Google.
It’s certainly possible, then that Warren Buffett and Bill Gates may be wrong on Bitcoin price – and we’ve seen already that the currencies can explode in value. The problem comes, however, in the fact that these currencies drop nearly as often as they climb.
While we’re still seeing a Bitcoin price that is much higher than it was at the same time last year, the price is around 50% lower than we saw at the end of 2017 – and that’s a significant amount higher than it was earlier this year where the price dropped under $7000. There’s definitely a possibility that Bitcoin price will continue to climb to meet – and even exceed – the value that we saw at the end of 2017, but there’s a near-equal possibility that it will crash and never recover.
While Bitcoin has largely climbed and climbed fast, the fact remains that the political landscape surrounding the cryptocurrency isn’t like it used to be. In addition to criticism from influencers like Bill Gates and Warren Buffett, multiple governments have come forward with hesitance and concern regarding the influence of cryptocurrency and the effects that it might have on the markets at large.
While traditional investors may have been able to ignore cryptocurrencies for years, it has become too big to discount with a total market cap in the hundreds of billions. The lack of regulation is a large reason why it has continued to thrive, but that freedom is starting to be threatened which may result in a downturn.
Overall, this recent decline in price may have been due to criticism by Warren Buffett and Bill Gates, but the downturn in general is due to a larger issue. The currency has certainly started to bounce back, but cryptocurrency remains a risky investment due to the incredible volatility that may be impossible to control.