The legendary US investor and an outspoken critic of cryptocurrencies – Warren Buffett – launched another bashing manifest against bitcoin, classifying it as a “gambling token.”
He argued that most people invest in it in search of “easy money,” alerting that the pursuit of getting rich in a short period of time hides its risks.
Throwing Stones at Bitcoin… Again
Although bitcoin has soared by over 80% YTD amid the massive financial uncertainty, some people might never change their adverse stance on it. One such individual is the American business magnate, philanthropist, and Chairman of Berkshire Hathaway – Warren Buffett.
In a recent interview for CNBC, he claimed the majority of people buy BTC only to bet on its possible price expansion in the future:
“Bitcoin is a gambling token, and it doesn’t have any intrinsic value. But that doesn’t stop people from wanting to play the roulette wheel.”
The Oracle of Omaha showed his negativity toward the sector in 2018, calling bitcoin “rat poison” and predicting that cryptocurrencies “will come to a bad ending.”
Contrary to his stance, BTC is still here and has passed through multiple advancements in the following years. The asset’s valuation has surged over 215% since he made those comments.
In addition, bitcoin has become legal tender in some countries (El Salvador and the Central African Republic), increased its popularity among broad society (especially during the current financial turmoil where fiat currency devalued), and was viewed by some as an alternative to the shaking banking system.
Recall that US regulators closed some financial institutions, including Silicon Valley Bank (SVB), Signature Bank, and Silvergate Capital, due to severe operational difficulties in March. At the same time, Buffett is known as a keen proponent of the US banking system.
Bitcoin’s main benefits come from the fact that it has decentralized nature, without a central authority of failure, and a fixed maximum supply of 21 million coins. On the other hand, central banks can print an unlimited amount of cash and thus trigger galloping inflation. Paper money also remains the most employed payment method by criminals in affairs like drug trafficking, prostitution, terrorist financing, and more.
Buffett’s Right Hand Shares the Same View
Another person who is an outspoken opponent of the cryptocurrency industry is the Vice Chairman of Berkshire Hathaway – Charlie Munger. The 99-year-old American wished in 2021 the asset class “had never been invented.”
He also advised people to stay away from crypto, classifying it as “an open sewer, full of malicious organisms,” and described bitcoin as an asset that stimulates child prostitution, kidnappings, and other crimes.
Some believe Buffett and Munger launch such bashing manifests because they do not understand the industry or they are at a stage of their career where it is too late for changes. Such a thesis was supported by SkyBridge Capital’s founder – Anthony Scaramucci – last year:
“These sorts of traditional finance people have made a decision not to do the homework, or maybe they’ve done the homework, and they have decided that it’s just too big of a change for them at this stage in their career.”