Billionaire financial guru Warren Buffett has dismissed cryptocurrencies as poor investments and predicts the phenomenon will ‘come to a bad end’.
In an outspoken tirade about digital currencies, he alleged buying Bitcoin is not really investing.
Buffett has a huge following as an investment guru and impressive credentials.
As CEO of conglomerate Berkshire Hathaway, he owns some of the world’s leading brands, like clothing company Fruit of the Loom, battery maker Duracell, food producer Kraft Heinz and fast food outlet Dairy Queen.
Buffett is also celebrated as one of the richest men in the world, with a personal wealth on more than $83 billion.
Despite his knowledge and experience in the world of investment, Buffett refuses to acknowledge cryptocurrency as investment.
Cryptocurrency is speculation
“There are two kinds of items that people buy and think they’re investing. One really is investing and the other isn’t,” he said.
“If you buy something like a farm, an apartment house, or an interest in a business, it’s a perfectly satisfactory investment. You look at the investment itself to deliver the return to you. Now, if you buy something like Bitcoin or some cryptocurrency, you don’t really have anything that has produced anything. You’re just hoping the next guy pays more for what you have bought than you paid.”
Buffett labels putting money into cryptocurrencies as a gamble more than an investment.
“If you want to gamble somebody else will come along and pay more money tomorrow for your Bitcoin, that’s one kind of game. That is not investing,” he said.
“If you ban trading in farms, you could still buy farms, and have a perfectly decent investment,” said Buffett.
Cryptocurrencies will end badly
“If you ban trading in Bitcoin, people would say why in the world would I buy it?'”
Buffett has aired his criticisms of cryptocurrencies before.
Earlier this year he said: In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending.
“When it happens or how or anything else, I don’t know. If I could buy a five-year put on every one of the cryptocurrencies, I’d be glad to do it. I would never short a dime’s worth.”
Buffett is well-known for his buy and hold investment strategy, believing that companies will increase in value over time if they are managed effectively.