The globally renowned investor, Warren Buffett who is also called ‘Oracle of Omaha’ for the right predictions regarding investment opportunities, has suggested investors to stay away from Bitcoin in the year 2015. He says, “Stay away from it. It’s a mirage, basically. … It’s a method of transmitting money.”
He further says, “It’s a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money, too. Are checks worth a whole lot of money just because they can transmit money? Are money orders? You can transmit money by money orders. People do it.”
According to the legendary venture capitalist, “I hope Bitcoin becomes a better way of doing it, but you can replicate it a bunch of different ways and it will be. The idea that it has some huge intrinsic value is just a joke in my view.” Nonetheless, given Buffett’s almost wholesale aversion to tech, this one isn’t surprising for a lot of observers.
Those who know Warren Buffett admit that the Oracle refuses to invest in what he doesn’t know, and he doesn’t know the technology sector, IBM notwithstanding. However, they have fundamental flaws in their understanding of Buffett’s understanding about the investment in Bitcoin, per se as here it is a fundamental understanding.
Antipathy towards Bitcoin for Obvious Reasons
Buffett’s problem with Bitcoin is not that it is a tech investment; rather, it is not any kind of investment at all as according to him it doesn’t have value. Earlier, in March this year in a TV show with CNBC he had explained Bitcoin as something that does not have value. Observation is that he invests mostly in the fiat system.
For instance, his investments are in insurance companies, banks like Bank of America, Goldman Sachs, SunTrust Banks, U.S. Bancorp, Wells Fargo, American Express, M&T Bank, GEICO, Applied Underwriters, General Re, Kansas Bankers Surety Company, National Indemnity Company, United States Liability Insurance Group, etc.
Thus, a general trend is that he invests in the companies or sectors that he knows about; in fact, he has made big profits off the bailouts, Quantitative Easing, Bitcoin was created in response to. A lot of observers believe that Warren Buffett is perhaps unaware of the potential of Bitcoin or it is just a conflict of interest that forces him to talk against the digital currency.
To contact the reporter of this story: Deepak Tiwari at firstname.lastname@example.org