What does the greatest investor of our time have to say about the Bitcoin mania? Bitcoin breaks all the rules in Mr. Buffett’s methodology for buying cash flowing businesses at a great price that have a moat around their business model. He missed growth stocks Amazon, Tesla, and Google because they did not fit into his methodology as wise investments. He was almost ruined with his original value investment in failing textile company Berkshire Hathaway but was able to pivot and create an insurance company and corporate conglomerate out of it that became one of the most successful companies in history. Understand that Warren Buffett’s time frame is the long term so he always plays the long game looking at where things will end up in valuation over decades not what a price moved in the last month or year.
In 2014 Buffett praised the cryptocurrency as an effective way of transferring money, and you can do it anonymously and all that.” but said it is a terrible investment.
“Stay away from it. It’s a mirage basically,” Buffett said on CNBC in 2014.
“The idea that it [bitcoin] has some huge intrinsic value is just a joke in my view.”
“You can’t value bitcoin because it’s not a value-producing asset.”
“People get excited from big price movements, and Wall Street accommodates,” he was quoted as saying. Describing bitcoin as a “real bubble”.
A check is a way of transmitting money, too. Are checks worth a whole lot of money just because they can transmit money?”
He said it wasn’t possible to determine how high it will trade for. According to him, there’s “a real bubble in that sort of thing.”
NOTE: Warren Buffett missed the Dot Com bubble & Bitcoin but still did okay for himself.