Why doesn’t Warren Buffet invest in Bitcoin?
Cryptocurrencies, with Bitcoin in the lead, continue to provoke the most bitter discussions between defenders and detractors, in addition to a flood of writings, reports and analyzes that, based on a single reality, which is the one we live in, are capable of reaching the most opposite conclusions. Come on, it is not necessary to be a lynx to realize that in both positions we can find a strong dogmatic component and personal opinion, not to mention personal interests, which tip the balance in one direction or another.
It happens, however, that only with the constant fluctuation of its price, both sides have arguments to defend their positions: the defenders citing the highs it has reached, and the detractors relying precisely on that, on its fluctuations and how terribly influenced Bitcoin and company are to an almost endless list of eventualities, from regulations for or against to decisions of a business nature.
The clearest example of the latter is found in the different occasions in which Elon Musk has modified Tesla’s policies regarding the payment of their cars with Bitcoin, something that many of us have understood as a sign of how easy it is to reverse the trend in your price. And yes, Tesla is a large company, but more for social influence than for sales volume, if we compare it with the main groups in the sector. What would happen if, for example, the VAG group made a similar move?
Thus, many would think that the main reason for many investors not to “bet” on Bitcoin has to do with its instability. However, as we can read on CNBC, this is not the reason why Warren Buffet, one of the most popular investors in the world, does not trust cryptocurrencies. The reason for it is another, which we have also seen used on many occasions:
“Whether it goes up or down in the next year, or in five or ten years, I don’t know. But what I’m pretty sure of is that it doesn’t produce anythingBuffett said at the annual meeting of shareholders of Berkshire Hathaway, his holding company. He expressed this lack of Bitcoin backing value, as opposed to one of his group’s most recent investments:
«For a 1% stake in all farmland in America, pay our group $25 billion, I’ll write a check this afternoon […] for 25 billion dollars, now I own 1% of the farmland… Now if you told me you own all the bitcoins in the world and you offered it to me for 25 dollars, I wouldn’t take it because what would I do with it? I’d have to sell it to you one way or another. It will not do anything… The farms will produce food…«.
Much tougher was Charlie Munger, vice president of Berkshire Hathaway, expressing his opinion on Bitcoin:
«In my life, I try to avoid things that are stupid and evil and make me look bad compared to someone else, and Bitcoin does all three. […] First of all, it’s stupid because it’s still likely to hit zero. It’s evil because it undermines the Federal Reserve System… and third, it makes us look foolish compared to the communist leader in China. He was smart enough to ban bitcoin in China«.
