Cryptocurrencies are experiencing a resurgence, led by Bitcoin. The largest cryptocurrency surged 10% last week and even briefly surpassed $30,000. This rise has been fueled by growing optimism surrounding the potential approval of a spot Bitcoin ETF.
But the rise has done little to impress Warren Buffett, one of the industry's harshest critics.
Despite the recent rally, Buffett maintains his belief that cryptocurrencies are highly speculative and unproductive assets. The Berkshire Hathaway CEO has previously likened Bitcoin to “rat poison” and compared its rise to the tulip bulb craze that gripped the Netherlands in the 17th century.
Buffett said in an interview with CNBC in 2018:
“The only thing you trust in BTC is whether the next person will pay you more or even be more excited for the next person to come. But existence itself produces nothing.”
Buffett argues that unlike tangible assets such as food-producing farmland and rent-generating real estate, respectively, cryptocurrencies are based solely on market sentiment and supply-demand dynamics. He also stated that he would not “buy all the BTCs in the world for $25” because they did not represent any value.
Buffett also claims that Bitcoin does not meet the definition of a currency due to its price volatility. He believes it is not a durable currency or a store of value.
In one of his last statements made in 2023, Buffett said the following:
“Things like Bitcoin are a gambling token and do not have any real value. But that doesn't stop people from wanting to play roulette.”
Here are some other quotes from Buffett about BTC and cryptocurrencies:
“Blockchain is important but BTC has no unique value, it doesn't produce anything. You can look at it all day long and it won't come up with small BTCs or anything like that. “This is basically an illusion.”
“For cryptocurrencies in general, I can almost certainly say that they will end badly. If I could buy a five-year put on each of the cryptocurrencies, I would be happy to do so, but I would never short a dime.”
A comment he made for BTC in 2014:
“Actually, it's an illusion. It's a very efficient way to transfer money, and you can do it anonymously. A check is also a way to transmit money. Are checks so valuable just because they can transmit money? I hope Bitcoin becomes a better way to do that, but it does it in a bunch of different ways.” “You can copy it. The idea that it has great intrinsic value is just a joke to me.”
*This is not investment advice.