Despite a lot of investors and billionaire expressing their trust in Bitcoin and other cryptocurrencies, Warren Buffet, one of the richest people in the world, still remains unsold. According to CCN, he doesn’t consider buying coins, comparing this type of investment to gambling.
During Berkshire Hathaway’s annual shareholder meeting, the billionaire explained that he is skeptic about Bitcoin, despite what other people say about it.
“There’s two kinds of items that people buy and think they’re investing,” he said. “One really is investing and the other isn’t.” Bitcoin, he says, isn’t.
But why buying cryptocurrency is not actually investing?
Warren Buffet gave the example of buying an apartment house or an interest in a business, saying that this can be done on a private basis and it’s definitely a satisfactory investment.
“You look at the investment itself to deliver the return to you. Now, if you buy something like bitcoin or some cryptocurrency, you don’t really have anything that has produced anything. You’re just hoping the next guy pays more.”
Therefore, this is not investing, but pure speculation.
Of course, there is nothing wrong with speculating, Buffet says. However, this is like gambling, so someone else might as well come along and pay more tomorrow.
A skeptic ever since the beginning
A few years ago, when cryptocurrencies started gaining traction, Warren Buffet called everything a “mirage” and claimed that it’s actually a joke to assign a value to something just due to the fact that it can be used to transmit money.
“Are checks worth a whole lot of money just because they can transmit money?,” the investor was then asking.
Back in December 2017, he also expressed his concerns about ICOs, claiming that they will not prove beneficial to the investment industry. As a side note, Binance CEO Zhao Changpeng recently revealed that cryptocurrency is one domain the billionaire has no idea about.
“Warren Buffett is a guy I truly respect from an investment point of view, but I do not think he understands cryptocurrencies at all,” Changpeng concluded.