Bitcoin and other cryptocurrencies have grown increasingly popular over the last few years. While they offer many benefits, they are not accepted by all retailers. Many people believe that this will change as more and more merchants start accepting digital currency as payment. In a recent interview, billionaire investor Warren Buffett gave his thoughts on cryptocurrency and its potential to disrupt the financial industry.
He believes that it is undervalued and its acceptance will depend on its inherent value. His words should give investors and speculators pause before getting too excited about the future of digital currencies.
“Assets, to have value, they have to deliver something to somebody.”
Bitcoin has always been a source of skepticism for Warren Buffett. However, the billionaire investor had the harshest words to say about cryptocurrencies over the weekend. Mr. Buffett made it clear that he opposes crypto regardless of whether people can make money off of bitcoin. Buffett opposes bitcoin because it has no intrinsic value.
“I don’t know whether it will rise or fall in the next year, five or 10 years. Buffett told Berkshire Hathaway shareholders in Omaha, Nebraska on Saturday that money doesn’t multiply, it doesn’t produce anything. Buffett continued, “it has a magic to it, and people have attached magic to lots of things.”
According to Buffett, if the people attending his meeting owned all the farmland in the U.S. and he was offered a 1% stake for $25 billion, he would write a check right away because it was a great deal on something productive. Buffett also said he’d buy 1% of all apartment rentals in the U.S. if it came up.
Buffett said he would not take it if you told him you had all of the bitcoin in the world and offered it to him for $25, since he would have to sell it back to you one way or another. Maybe it would be the same people, but it wouldn’t make any difference.
Buffett finished by referring to Satoshi Nakamoto, the creator of bitcoin, who “may or may not have existed.” “The apartments are going to produce rental and the farms are going to produce food,” he said.
Buffett argued that bitcoin became so popular because of a big mystery surrounding its origins rather than because Satoshi could create a mystery around it. “But we all know what I am,” he said.
“Certain things have value that don’t produce something tangible. I mean, you can say a great painting probably will have some value 500 years from now,” Buffett said.”
But assets must provide something to somebody for them to have value, and there is only one currency. We can introduce Berkshire coins or Berkshire money,” Buffett said, referencing a hypothetical crypto coin.
The only thing that matters is money in the end,” Buffett countered, holding up a $20 bill. “Anyone who thinks the United States will change the way they treat Berkshire money is out of their minds.”
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