When Warren Buffett speaks out about investment, you had better listen, as he is one of the best. Speaking about Bitcoin recently, Buffett said that it would come to a bad ending.
He is the latest authoritative figure to criticize cryptocurrency. Interestingly, his comments come just a day after Jamie Dimon, the Chief Executive of JP Morgan, said that he regretted bashing Bitcoin.
An Unprecedented Boom
Bitcoin started off as an idea that most people brushed off saying that it would never work. It was initially valued at as little as $30. Today, Bitcoin is worth thousands of dollars – to be exact, it is currently valued at a little over $14,000. Its price has grown tremendously of late, but it has also fluctuated wildly in both directions.
Some people are hopeful that Bitcoin’s value will continue growing, but others are scared that its bubble may already be in the initial bursting phase.
No Method in the Madness
For a man who has made billions through his investments and maintained the rank of the world’s wealthiest person, Warren Buffett has a deep knowledge of the financial sector. As such, it comes as a surprise when he says that he doesn’t understand how Bitcoin and other cryptocurrencies work. This is what he uses to justify his reluctance to invest. It is also why he says that he doesn’t know how the end of Bitcoin will come, but he is certain that it will be bad.
Warren Buffett says that he personally wouldn’t invest in Bitcoin, not even to short it. In fact, he has threatened to fire any of his employees who invest in digital currencies. And, while this may seem a bit rash, it only goes to show the self-discipline with which the billionaire investor operates.
Many prominent people have both endorsed and criticized bitcoin and other cryptocurrencies in general. One of Bitcoin’s main critics was Jamie Dimon. The CEO considered the digital currency a fraud and argued that it was ideal only for illegal activities such as “paying off assassins and funding terrorism”. However, it seems that Dimon has changed his opinion and even developed a liking for it, recently.
Christine Lagarde, a senior figure for the International Monetary Fund, has also warned against ignoring Bitcoin and other digital currencies. To this end, the EU is embarking on a project to regulate crypto, and so are other nations around the world.
However, only time will tell whether Warren Buffett is indeed right, or whether virtual currencies are here to stay.
Image Credit: CNBC
Do you think Warren Buffett is correct? Would you bet your money on his analysis and go short of digital currencies? Share your thoughts with us in the comments below.