While big named sceptics like Soros and Rockefeller are accepting bitcoin as the future and indulging in the market, one among the world’s biggest and most successful businessmen is still not convinced. Warren Buffet, the CEO of Berkshire Hathaway, has spoken about Bitcoin again and didn’t have very encouraging things to say.
In an exclusive interview with Yahoo Finance right before Berkshire Hathaway’s annual shareholder meeting, Warren Buffet opened up about Bitcoin and its market. Here is what he had to say;
“If you buy something like a farm, an apartment house, or an interest in a business… You can do that on a private basis… And it’s a perfectly satisfactory investment,” he said.
“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.”
“You aren’t investing when you do that. You’re speculating. There’s nothing wrong with it. If you wanna gamble somebody else will come along and pay more money tomorrow, that’s one kind of game. That is not investing.”
This is not the first time the business magnate has spoken openly about the market. He has previously refused to comment saying he had very little knowledge about the market and its technology.
He has maintained his anti-crypto position on currencies and the market and in an interview sometime back went on to prophesize that the cryptocurrency market will have a ‘bad ending’ and will definitely fall over the next five years.
The beginning of 2018 saw everyone who had and has, in the past, been skeptics about cryptocurrency and the market take back what they said and start investing, for example JP Morgan and Chase, the Rockefeller family, etc. However, the world’s first and most valuable digital currency has managed to keep one of it’s naysayers pretty consistent.
Since last year’s massive price and value hike, when bitcoin touched $20,000, it had converted a lot of people who were anti-crypto and bitcoin to pros because the way in which the value shot up, is a trend that no stock has witnessed in the past. A lot of people bought into the market in January after prices plummeted, in the hope of being able to capitalise on the next market bull.
However, for investors, businessmen and women worldwide, Warren Buffet’s investment advice is nothing short of the gospel and literally everything he says comes with a lifetime’s worth of credibility. And he still remains the crypto industry’s biggest and possibly most influential skeptic.
Understanding The Apprehension
It is no secret that all financial institutions, most governments and all traditional investors are dead set against cryptocurrencies. It has been named a bubble, a gimmick and whatnot. But on closer inspection and on decoding of the dense coat of apprehension that the market is surrounded by, it boils down to three main reasons; security, volatility and regulation.
The blockchain is a relatively new technology and is quite advanced. It is not the easiest to use for people who do not come from math and programming backgrounds and it is only normal for there to be a lot of friction in its adoption. A lot of things that are said about blockchain is said in ignorance because it is, in theory, an immutable ledger.
The second reason traditional investors are against the crypto market and have repeatedly called it a bubble is because of the high volatility of the market. A coin in the market can, literally, fall from a valuation of $100 USD to $0.03 USD from market open to close. Having said that, the stock market is no different, it is just that its ups and downs are a lot lesser and its lows are easier to recover from.
This reason is probably the only valid reason for all the fuss about Bitcoin and cryptocurrencies and that is regulation. The only way to bring the entire market to its knees is governments coming together and making a unanimous decision to ban the use of it. Fortunately for us, that is not likely to happen because our governments can’t agree on national issues, leave alone international ones.
So it is true that the traditional investor will and is against bitcoin, altcoins and the entire market, but the place their opinions come from is not all wrong and controversial. And the hue, cry and disbelief after every bigwig slam the cryptocurrency market is absolutely unnecessary. The market is new, in comparison to other financial and industrial markets and these are growing pains that every new market went and continues to go through.