Warren Buffett, one of the world’s most successful and wealthy investors, remains skeptical about Bitcoin, despite the fact that cryptocurrency is gaining recognition. At Berkshire Hathaway’s annual shareholders’ meeting, he noted that it is a non-productive asset that does not create anything concrete, reports CNBC.
Despite the fact that public perceptions of cryptocurrency are changing, Buffett still would not buy it.
“Whether it goes up or down in the next year, or five or 10 years, I don’t know. But the one thing I’m pretty sure of is that it doesn’t produce anything. It’s got a magic to it and people have attached magic to lots of things,” said the investor.
Even Bitcoin enthusiasts mostly see cryptocurrency as a passive property that investors buy and hold, hoping for price growth over time.
More experienced investors can use cryptocurrencies for lending or as collateral. However, the currencies used for this purpose are mostly young and speculative.
Buffett explained why he sees no value in Bitcoin, compared to other things that create other types of value.
“If you said … for a 1% interest in all the 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 the apartment houses in the country and you want another $25 billion, I’ll write you a check, it’s very simple.
Now if you told me you own all of the bitcoin in the world and you offered it to me for $25 I wouldn’t take it because what would I do with it? I’d have to sell it back to you one way or another. It isn’t going to do anything. The apartments are going to produce rent and the farms are going to produce food,” said the investor.
Investors have been thinking for years about how to value Bitcoin – in part because it can perform a variety of functions. In Western markets, it was mostly an investment asset. In other markets, people still see the potential to use it as a digital currency.
“Assets, to have value, have to deliver something to somebody. 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, this is money,” Buffett said, holding up a $20 bill. “And there’s no reason in the world why the United States government … is going to let Berkshire money replace theirs.”