Buffett still says bitcoin is headed for a ‘bad ending’
Legendary investor Warren Buffett doesn’t see any value in the cryptocurrency market.
Despite the rebound in cryptocurrency prices over the past month and new Wall Street developments involving coin trading, one of the world’s most renowned investors still isn’t coming around.
Warren Buffett dismissed the potential of blockchain darlings like bitcoin and Ethereum during Saturday’s Berkshire Hathaway annual meeting. Specifically, The Wall Street Journal reported Buffett as saying, “Cryptocurrencies will come to bad endings.” The explanation provided for that dire prediction comes from his view that cryptocurrencies should be lumped into the same class as gold and stamp collections.
“If you had bought gold at the time of Christ and you figure the compound rate on it, it’s a couple tenths of a percent,” he said in the article.
The price of gold, and therefore cryptocurrencies, he discussed, is dependent on more people getting into the market. He sees a point when the hype will fade away and money will leave the cryptocurrency market.
As an investor, Buffett is focused on assets that continually produce valuable products or services – and buying them “on sale”. Read all about Buffett’s style of value investing – and how he developed it – in our comparison of Buffett and cryptocurrency.
Meanwhile, the novelty of bitcoin and the multitude of altcoins that have followed it has presented significant challenges to how they can or should be valued. The technology is still in its infancy, so estimates are often based on unproven theories, projections of future adoption and the reputation of supporters and partners.
Whether or not cryptocurrency meets the fate Buffett predicts – or when – remains to be seen. Nevertheless, the rest of Wall Street wants to be involved in the ups and downs along the way. The most recent headline was Goldman Sachs’ entrance into bitcoin futures trading, which the Chicago Board Options Exchange has offered since December.
Learn more about cryptocurrency and its underlying blockchain technology in our introductory guide.
Disclosure: At the time of writing, the author holds XRP, CND, ANT, DRGN, EOS, NEO, ADA, AION, GTO, SALT, QTUM and WAX, and actively trades BTC and ETH.
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