Why Warren Buffett hates Bitcoin?

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3 Reasons why Warren Buffett hates Bitcoin




 Warren Buffett is an American investor, business tycoon, philanthropist, and the chairman and CEO of Berkshire Hathaway. He is most successful investors of all time..

 If there's one thing Warren Buffett will never ever invest in, it's Bitcoin -- or any form of cryptocurrency. He's called it "rat poison squared," a "mirage," and a "gambling device."

So Question is why he hates this miracle digital coin/currency ?

Buffett doesn’t like Bitcoin because he considers it an unproductive asset.

1. Doesn't have a value like equity or commodity  

Buffett has a well-known preference for stocks of companies whose asset value, goodwill and cash flow come from producing things. But cryptocurrencies don’t have real value, Buffett said in a CNBC interview in 2020.

“They don't reproduce, they can't mail you a check, they can't do anything, and what you hope is that somebody else comes along and pays you more money for them later on, but then that person's got the problem.”

2. Buffet doesn't understand Crypto

Buffett turned one of the most successful investors in history by holding stocks he understands for longer period

"I get in enough trouble with things I think I know something about. Why in the world should I take a long or short position in something I don't know anything about?”

But people like to gamble, he told CNBC after a 2018 Berkshire Hathaway annual meeting, which is another problem with nonproductive assets.

“If you don’t understand it, you get much more excited than if you understand it. You can have anything you want to imagine if you just look at something and say, ‘that’s magic.’”

3. He doesn’t think crypto counts as money

As a tradable asset, Bitcoin boomed. But does it meet the three criteria of money? According to the most common definition, money is supposed to be a means of exchange, a store of value, and a unit of account.

But Buffett calls it a “mirage.”

“It does not meet the test of a currency,” the billionaire said on CNBC in 2014. “It is not a durable means of exchange; it's not a store of value.”

 

CRUCIAL QUOTE

“I don’t welcome a currency that’s so useful to kidnappers and extortionists,” Munger said. “I think the whole damn development is disgusting and contrary to the interests of civilization.”



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