Bitcoin has steadily gained acceptance in the traditional finance and investment world in recent years, but Warren Buffett remains sceptical of bitcoin.Â
Berkshire Hathaway Annual Shareholder meeting
He stated at Saturday’s Berkshire Hathaway Annual Shareholder Meeting that it is not a productive asset that generates tangible value. Buffett remains unconvinced, despite a shift in public perception of cryptocurrency.Â
“Whether it increases or decreases in the next year, five or ten years, I have no idea. However, one thing I am fairly certain of is that it produces nothing,” Buffett stated. “It possesses a magical quality, and people have imbued a variety of objects with magic.”Â
Bitcoin
Even bitcoin enthusiasts frequently view bitcoin as a passive asset that investors purchase and hold in the hope of a long-term price increase. Buffet stated that “nobody” is short bitcoin and that everyone is a long-term investor.Â
Certain coins enable more sophisticated crypto investors to leverage their crypto assets productively — through lending or collateral — in order to generate additional portfolio benefits. They are, however, still in their infancy, are highly speculative, and have not yet achieved mainstream adoption, as bitcoin has.Â
Buffett elaborated on why he does not believe bitcoin has value, comparing it to other types of value.Â
Warren Buffett explainsÂ
“If you say… for a 1% interest in all farmland in the United States, pay our group $25 billion,” Buffett said, “I’ll write you a check this afternoon.” “For $25 billion, I now own 1% of the world’s farmland.”
[If] you offer me 1% of all apartment buildings in the country and another $25 billion, I’ll write you a check. Now, if you told me that you owned every bitcoin in the world and offered it to me for $25, I would decline because I have no idea what I would do with it.
I’d have to sell it back to you somehow. It will accomplish nothing. The apartments will generate rent, and the farms will generate food.”Â
“For an asset to have value, it must provide something to someone. And there is only one accepted currency. You can come up with anything — we can display Berkshire coins — but at the end of the day, this is money,” he explained, holding up a $20 bill.
“And there is no reason in the world why the United States government would allow Berkshire money to take the place of its own.”Â
ConclusionÂ
Warren Buffett and Charlie Munger have both previously expressed their contempt for bitcoin. Buffett famously stated that bitcoin is “likely squared rat poison.” On Saturday, Munger reaffirmed that sentiment.Â
“I try to avoid things in my life that are stupid, evil, or make me look bad in comparison to someone else – and bitcoin does all three,” Munger explained.
“To begin, it is foolish because it is still likely to fall to zero. It is evil because it weakens the Federal Reserve System… and third, it makes us appear foolish in comparison to China’s Communist leader. He was astute enough to institute a bitcoin ban in China.”
Edited By:Â Khushi Thakur
Published By:Â Bhavya Dedhia
