Warren Buffett provides his broadest explanation as to why he doesn’t believe in bitcoin

Bitcoin has steadily gained acceptance from the traditional world of finance and investment in recent years, but Warren Buffett holds onto his skeptical stance on bitcoin.

He said Saturday at Berkshire Hathaway’s annual shareholder meeting that it is not a productive asset and produces nothing tangible. Despite a shift in public perception of cryptocurrency, Buffett wouldn’t buy it anyway.

“Whether it’s going to rise or fall in the next year, or five or 10 years, I don’t know. But the one thing I’m pretty sure about is that it doesn’t produce anything,” Buffett said. “It has magic and people have attached magic to many things.”

Bitcoin enthusiasts also tend to view cryptocurrency as a passive asset that investors buy and hold and hope to see a rise in price over a long period. Buffet himself commented that there is “nobody” short of bitcoin, all are long-term holders.

For more sophisticated cryptocurrency investors, offer some coins a way to use their cryptocurrencies productively, either through loans or as collateral, to create additional wallet benefits. However, they are still young, highly speculative, and have not entered the mainstream like bitcoin.

Buffett explained why he sees no value in bitcoin, comparing it to things that generate other types of value.

“If you said … for a 1% interest in all farmland in the United States, pay our group $ 25 billion, I’ll write you a check this afternoon,” Buffett said. “[For] $ 25 billion I now own 1% of the farmland. [If] You offer me 1% of all condos in the country and you want another 25 billion dollars, I’ll write you a check, it’s very simple. Now, if you told me you own all the bitcoins in the world and offer them to me for $ 25 I wouldn’t take it because what would I do with it? I should resell it to you one way or another. It won’t do any good. Apartments will produce rents and farms will produce food. “

Investors have been for years perplexed about how to value bitcoin partly due to its potential to perform various functions. In Western markets it has established itself as an investment asset, particularly in the past year as rates and inflation have risen. In other markets, people still see huge potential for its use as digital money.

“Businesses, to have value, have to deliver something to someone. And there’s only one currency that’s accepted. You can come up with all kinds of things: We can put up Berkshire coins … but in the end, that’s money,” he said. , holding up a $ 20 bill. “And there’s no reason in the world the US government … will let Berkshire’s money replace theirs.”

Both Buffett and Charlie Munger have made hostile comments towards bitcoin in the past. Most famously, Buffett said bitcoin is “probably square rat poison.” Munger doubled down on that sentiment on Saturday.

“In my life, I try to avoid things that are stupid and evil and make me look bad compared to someone else – and bitcoin does all three,” Munger said. “First, it’s stupid because it’s still likely to go zero. It’s evil because it undermines the Federal Reserve System … and third, it makes us look foolish compared to the Communist leader in China. He was smart enough to ban bitcoin in China. . “