Warren Buffett & Bitcoin - Old School Investor Meets Innovative Technology...
Warren Buffet is definitely a great investor and I guess no one will doubt his huge success from the past years and decades. But regarding his statements on Bitcoin or better said cryptocurrency in general one might raise the question, whether he actually understands it or just doesn't like it, because it's something he can't grasp.
Without any offence it can be argued that Mr. Buffet at the age of 87 years might simply not see the huge potential cryptocurrency provide to the people and our world as a whole. It's just something that might still be too new for his in general rather classical views on investments.
Please don't get me wrong as I highly respect Warren Buffet and his opinions in general. He is for sure a wise man with a lot of knowledge to share but regarding Bitcoin I somehow feel like it's not his territory anymore but rather one for the younger generations.
According to Buffet, Bitcoin is not a “productive” asset, unlike land or corporate shares. As a result, investors’ demand for it is the only price-determining factor, making digital currency a handy tool for “charlatans,” Buffet said.
Based on the above statement one can see his focus on the traditional asset types just like land or corporate shares. His pessimistic view on cryptocurrency can be easily countered with the many charlatans manipulating the fiat market, namely the central banks, which are printing billions of new fiat money every month. At least those are my 2 cents on this...
What's your opinion? Is Buffet right to some extend or are you rather the same opinion as I am on this topic? Please leave a comment and let us know :)
( Source - Cointelegraph.com )
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Buffet is not keen about gold neither. He is just not at all interested in this particular asset class.
mmh that might be a mistake as I somehow feel that precious metals will play a big role in the next crisis, which is imminent somehow...
Markets evolve just as anything else. I also have no doubt about Mr. Buffet knowledge. I don't think anyone does. But it is clear today financial technology and markets (especially distributed ones) has nothing to do with the markets he has dealt most of his career.
On the other side, his fortune is based on traditional instruments and he probably feels fear the same way traditional financial institutions do when they feel they are losing control, specially into something is hard to control.
At 87 one should be wise enough to just listen to the new generation instead of just throw junk into the market when not understanding.
I don't think he's actually afraid of loosing his fortune but rather like you say he doesn't understand it and therefore doesn't like it either.
Well Warren made his money off of traditional investing. Naturally he would be skeptical of anything that doesn't fall within the realm of the ways he's made his money, which cryptocurrencies are definitely outside that bubble. It's hard to imagine, even as a savvy and critically thinking investor, he would look at an asset like this other than a what he's generally said. But his Rule #1 is Invest in what you know. He simply does not know this asset class, thus he won't invest. It looks riskier than he's willing to be, it's something he doesn't understand, and he's admitted that's all it takes for him to not want to invest in something.
It's a fair argument, but not one anyone will listen to, when the reward vastly outways the risks and people want to be apart of this emergent marketplace (assuming they keep their investments appropriate as always). The trustless aspects of cryptocurrencies speak to a lot of what's wrong with the current financial system, and where people would like to see it head. Warren isn't into it on that level, he's just asking for their earnings like it's a company, and is like "oh it's a decentralized whose-a-whatsit? No thanks." He's not going to get it, and he's generally a bad source for people to go to for broad crypto-market analysis IMHO. His opinions on traditional markets would be very appropriate to seek.
Buffet was a great investor but it somehow got quite silent around him during the last years. Maybe as well because there isn't too much to tell about him anymore either, nothing really amazing seems to happen on his side anymore.
To be honest though, I think I wouldn't invest into any new asset class either anymore at the age of 87. It's just not relevant anymore by then and unnecessary to take such big risk.
Especially when you're a billionaire and you're set, he has other things to hold to his interest and this is just some buzz in his ear. He has many misses on emerging businesses. No one can get it all right, that's why he says invest in what you know. I respect the man alot, but while his opinion is relevant, it's certainly not dogma in this arena. I think the understanding the tech is just as important as understanding investing in crypto. It's a 10/10 hard subject on both tech and investment fronts. Knowing one side of that is helpful, but you need both.
I think it's mainly because he's too old to understand the technology and its potential to change the way that people transact and will pose a real threat to the banking industry. But who knows maybe he's afraid like the rest and is masking this fear by portraying his stance to those in the know as "oh I'm just an old man who doesn't understand the tech and its potential."
Six months to a year ago they mocked and they ridiculed (ahem--Jamie Dimon and ilk) but now JMP and others are starting to trade BTC and (try to) get involved in blockchain projects...who am I kidding, they've been trading it ever since it hit $5K then dropped to $3 and then rebounded as JPM covered their short positions and went long (somewhat speculation on my part but their traders did get caught red handed trading BTC right after Dimon said he'd fire any JPM trader who touched BTC). Did he fire those traders? I'm not in a position to make an informed statement on their employment status at JPM but I am making an educated guess--Probably not.
I have much respect for Mr. Buffet and his investment strategies and methods are tried and true. But I think he's completely uninformed when it comes to cryptos....that or he is informed and he's scared just like the rest of the snakes on Wall Street. Not to give snakes a bad name or anything...
It's true that the big guys are more and more getting scared as cryptocurrency and especially Bitcoin just present themselves as unbeatable. Whatever FUD they spread crypto just continues to grow and expand.
Regarding Buffet I'm just of the opinion that he doesn't see any sense in a decentralized structure/organization as it's simply the complete opposite of what he's used to.
Warren Buffet made it clear he won’t invest in something he doesn’t understand I believe he couldn’t wrap his head round blockchain so it is a scam to him
Mr. Buffett's statements, with no disrespect, as those of any investor, should be taken with caution. These are not always shared with the intent to share from a vast knowledge and experience, but sometimes have a bias, either because of current investments, future investments or simply the mutual influence and interests of the closest relationships.
I remember Warren Buffett recently said Apple will be the first company to reach 1 trillion market cap. That comes from the position of an investor in Apple stock, who recently increased his exposure to Apple by another 75 million shares through his fund Bershire Hathaway.
I agree with buffet on almost everything. And I used to agree with him on everything. Crypto changed That. I don’t think he wants to see the whole picture. He will one day though.
I'm not sure whether he'll get to see the whole picture at all. In my opinion he doesn't really care anymore either though, which one can't take in a bad way either as the man is 87 years old already. You don't have to take each trend I guess.
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In the 2013 words of Mr Andreessen..."Once again, Old White Men crapping on new technology they don't understand"
Buffett, your wrong bubs.
Hi @steembusiness,
I do not think age is a factor when it comes to Warren Buffet making claims that Cryptocurrencies are not a "productive asset". Furthermore, I do not think we should dismiss his mental horsepower, the advisors he has to hand and personal experience in and understanding of finance and say he does not understand Bitcoin just because this is a ‘new and disruptive area’.
It is merely a fact that cryptocurrencies in themselves are not 'productive asset' beyond the mere speculation which gives it its price.
However, the underlying technology 'Blockchain' when fully deployed is most definitely a value-generating asset as it has the potential for executing asset transfers and storing transactions and contracts. Blockchain (not the cryptocurrency itself) implemented in various industries can add value for example by changing transaction, information flow and business processes, reduce costs and in the long term potentially change the way we think about organisations themselves. Blockchain compared to a standard Cryptocurrency is most definitely a ‘productive or value-generating asset’.
I hope this makes sense?
Best Regards,
@shenobie