Not very long ago, Warren Buffett had clearly stated that Bitcoins will come to a bad end, he held on to his view and explained how investing in Bitcoins is pure gambling. The Berkshire Hathaway CEO urged investors to not confuse speculation with investment.
Explaining why Bitcoin is not an investment, he said, “if you buy something like a farm, an apartment house, or an interest in a business… You can do that on a private basis… And 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.”
“You aren’t investing when you do that. You’re speculating. There’s nothing wrong with it. If you wanna gamble somebody else will come along and pay more money tomorrow, that’s one kind of game. That is not investing,” said the billionaire CEO.
Is Buffett making a case to shun Bitcoins altogether? Well, he rather seems to want investors to understand the difference between speculation and investment and thus protect their capital against ‘gambling’ or risking it being mindful of the extent of risk.
Buffett has several times expressed his doubts over Bitcoin and other cryptocurrencies. In 2014, Buffett called Bitcoins a ‘mirage’ and suggested buyers to stay away from it. In January this year, he outright said he will never invest in cryptocurrencies.