Unless you’ve been living under a rock, you’ve probably heard of “Bitcoin” by now.
The digital currency that was once dismissed as a fad for the fringes of the internet has gone mainstream, and made headlines over the past year as its value rocketed from around $1,000 at the beginning of 2017 to a peak of nearly $20,000 per coin.
Bitcoin and other “cryptocurrencies” like it have made some people very wealthy… but now one of the richest men in the world is warning others about the investment.
Warren Buffett is in many ways the opposite of Bitcoin: He’s old fashioned, not flashy, and looks like a grandpa — probably because he is one.
He’s also worth an estimated $75 Billion, thanks to shrewd investments through his holding company, Berkshire Hathaway. It figures that everyone is clamoring for the “Oracle of Omaha’s” opinion on Bitcoin, one of the hottest investments available right now… but early adopters won’t like his answer.
“In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending,” the world’s most famous investor told CNBC.
However, Buffett also explained that his generalized prediction didn’t come with a due date.
“When it happens or how or anything else, I don’t know,” he admitted. “We don’t own any, we’re not short any, we’ll never have a position in them.”
Enthusiasts of cryptocurrency were quick to point out that although he obviously knows his way around investing, the aging billionaire is famously cautious about technology — including tech that ends up changing the world.
Have you ever bought Bitcoin?
The 87-year-old Warren Buffett reportedly didn’t carry a cell phone for many years even into the late 2000’s, and now only owns an outdated Nokia flip-phone. He doesn’t use email or the internet.
“Buffett didn’t initially believe in tech giants like Google and Amazon,” reported a separate report from CNBC. “In 2017, the billionaire investor admitted that passing up on Google years before. Buffett also expressed regret over not investing in Amazon when he had the opportunity.”
The iconic investor has himself explained that he doesn’t understand modern technology, including Bitcoin. “I get into enough trouble with things I think I know something about,” Buffett admitted to CNBC. “Why in the world should I take a long or short position in something I don’t know anything about.”
Hindsight, as they say, is 20-20. It’s always easy to look back at something like the dot-com crash or the housing crisis and say, “of course we should have seen that.”
It’s much more difficult to predict the future, and even harder to make specific calls about how high something will go or when it will end.
Even Buffett’s prediction about cryptocurrency coming to “a bad ending” is suspiciously vague. If it happens in a year, many people should be concerned… but if that “ending” is a decade in the future, there could be plenty of room for investors to get on board.
While many poorly-run websites from the late 1990s didn’t make it, companies like Amazon survived the dot com crash and became even more profitable over time.
Bitcoin and other digital currency could go the same way. Some may crash, but others might survive and grow… and predictions like Buffett’s could be both right and wrong, depending on the viewpoint.
H/T Zero Hedge
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