Bitcoin has not been a favorite for years with Warren Buffett, the CEO of Berkshire Hathaway. Virtual currencies have often been equated by him to gold because, according to him, both the assets are very speculative and do not deliver as much profits on investments as do stocks.
Bitcoin was “probably rat poison squared”, Buffet told the media just before the Berkshire annual meeting in the weekend.
Buffett joked at the meeting that “if you had bought gold at the time of Christ and you figure the compound rate on it, it’s a couple tenths of a percent.” What Buffett meant to say from those comments made at the meeting was that one can purchase bitcoins but nothing of value would be ever produced by it.
Bitcoin other crytpocurrencies “will come to bad endings”, he further said when he was asked about bitcoin from among the audience.
There were even more blunt comments made about cryptocurrencies by Berkshire vice chairman and longtime Buffett confidant Charlie Munger.
“I like cryptocurrencies a lot less than you do,” Munger said to Buffett. “To me, it’s just dementia. It’s like somebody else is trading turds and you decide you can’t be left out.”
Bitcoin was also referred to as a poison by Munger. He had even called it “noxious” while speaking at the shareholder meeting of The Daily Journal, which is a newspaper publisher in Los Angeles and where Munger is the chairman.
However, there are many who would claim that both Buffett and Munger have been wrong in their judgement and opinions about the cryptocurrency – particularly Buffett.
It was in 2014 that he had called bitcoin as a “mirage” at a time when the cryptocurrency was trading at about $600. And now considering the present value of the cryptocurrency – despite the recent drop in prices, bitcoin has bene bale to deliver a much better performance than the broader market including that delivered by the Berkshire stock and some of the top Berkshire holdings such as those of Apple Inc.
This is the reason that there are many cryptocurrency experts who believe that the repeated bitcoin bashing from Buffett and Munger should be summarily ignored by investors.
“What I do find monumentally baffling is that two of the world’s most successful investors cannot see the intrinsic value of some form of cryptocurrency,” Nigel Green, CEO of financial consulting firm deVere Group, wrote in a report early Monday.
“Do they honestly believe that there is no place for, and no value of, digital, global currencies in an increasingly digitalized and globalized world?” Green added.
(Adapted from MoneyCNN.com)