Buffett has been critical of Bitcoin for a long time (BTC), but in recent years, he’s mostly avoided expressing his opinions. However, at this year’s Berkshire Hathaway annual meeting, Buffett explained his concerns in greater depth. He stated that he would not purchase Bitcoin at any price and that he didn’t understand how the government would allow anything to take the place of the dollar.
Buffett’s main Bitcoin objections
According to Warren Buffett, assets must provide something to someone in order to have value. This has long been his major worry regarding Bitcoin. “Whether it goes down or up over the next year, or five years, or ten years,” he remarked at the investor meeting, “I don’t know. But one thing I’m fairly certain of is that it does not reproduce itself.”
The following are the issues he addressed:
1. It doesn’t do anything
According to Buffett, Bitcoin has a market capitalization of around $740 billion right now, but he would not buy it even if it were offered at half that price. “I wouldn’t take it even if you said you own all of the Bitcoin in the entire world and offered to sell it to me for $25 because what could I do with it,” he said. “It won’t accomplish anything,” he added. Buffett likes assets that generate money; cryptocurrency does not fall within this category.
The billionaire investor notes that whereas property, which generates income or farms that produce food, is unproductive, Bitcoin is an unusable asset. He explained the distinction between productive assets and non-productive assets to the gathering by noting that the latter is dependent on someone paying more than the previous buyer.
2. There’s only one currency
“There’s only one currency,” Buffett added. He claimed that, while you can devise other sorts of coins, the preferred money is the US dollar. Indeed, Buffett stated that anyone who believes the United States will allow another currency to take its place is “absurd.”
This corresponds to comments made by another money expert about Bitcoin. Ray Dalio, unlike Buffett, is less wary of cryptocurrency and recognizes some of its potential. But he worries the government will try to stamp out Bitcoin and gold if they become a superior option. “I’m concerned that Bitcoin’s most significant danger is being successful because if it is, the government will try to destroy it,” he wrote in a blog post.