Why doesn't Buffett invest in Bitcoin?
When Bitcoin went from worthless to a "high" of more than $100, Buffett said:
Bitcoin is rat poison.
Later, a reporter asked him what he thought about Bitcoin rising from more than $100 to more than $9,000?
Buffett replied: "It may be rat poison squared."
At the Berkshire Buffett shareholders meeting, the stock god once again expressed his pessimistic attitude towards Bitcoin:
"The final result of cryptocurrency will be very bad because they do not generate any value related to this asset."
The value of assets such as cryptocurrency depends on more people entering the market, and then the holders sell them to the receivers at a higher price than the purchase price.
In an interview with Yahoo Finance, Buffett pointed out that buying cryptocurrency is not investment but speculation.
"There's nothing wrong with that. If you want to take a gamble, someone will come tomorrow and be willing to pay more."
"That's a form of gambling. It's not an investment."
"We will never buy cryptocurrencies. Even the things I think I know a little about have caused me enough trouble. Why would I buy something I don't understand?"
Buffett: Stay away from Bitcoin
As early as 2014, Buffett warned in an interview with CNBC:
"Stay away from Bitcoin. It's basically just a phantom, a way to transfer money.
This is a very effective way to transfer money, and you can transfer money completely anonymously. Checks are also a way to transfer money. But is a check worth a lot of money just because it can transfer money?
Are bills of exchange worth a lot of money? People can also transfer money through bills of exchange. I hope Bitcoin can be a better way to transfer money, but you can copy it in a lot of different ways.
The idea that Bitcoin has great intrinsic value is a joke to me."
Before Bitcoin came out, Buffett's attitude towards gold was never to invest. He believed that gold had two major flaws.
First, as a non-productive asset, gold has no "production capacity." This means that gold itself cannot be transformed into more gold, nor can it be transformed into any other value.So Buffett's usual means of investment is to acquire oil fields, which can produce oil, acquire factories, which can manufacture products, and invest in stocks, which can generate dividends.
"But if you buy an ounce of gold, it will still be an ounce of gold after hundreds of years."
He believes that the second biggest flaw of gold is that it lacks practical use. Although gold can be processed into jewelry or some other industrial products, these are not enough to support widespread demand. Even for non-productive assets such as copper and steel, as long as they have a wide range of uses, at least demand can be counted on to push up prices.
The reason why Buffett did not invest in Bitcoin before is probably similar to his not investing in gold.
In his view
First: Bitcoin is a non-productive asset, not an asset that can generate value
At the same time, Bitcoin has not yet supported a wide range of uses and demand, so it is a "real bubble."
Now the stock god Buffett has finally recognized the value of Bitcoin and started buying it. We know that Buffett has always been skeptical about Bitcoin in the past, but he has changed his attitude.
