Warren Buffett, the renowned investor and CEO of Berkshire Hathaway, has never been shy about expressing his opinions on various investments. And when it comes to bitcoin, he has made his views abundantly clear.
At the 2022 Berkshire Hathaway Annual Meeting, Buffett compared bitcoin to farmland and apartment complexes, stating, “If the people in this room owned all the farmland and you said for a 1% interest in all the farmland in the United States, pay us the bargain price, $25 billion dollars, I’d write you a check for $25 billion. If you did the same with all the apartment complexes in the United States for bargain price, I’d write you a check. Now if you told me you owned all 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?”
Buffett’s reasoning behind this statement is based on the fundamental value of assets. Farmland and apartments produce tangible value in the form of food and rental income, respectively. Bitcoin, on the other hand, does not have any inherent productive value. As Buffett pointed out, “The apartments are going to produce rental, and the farmland is going to produce food, and if I’ve got all the bitcoin, it’s a mystery.”
Buffett further expressed skepticism about the long-term prospects of bitcoin, saying, “Whether it goes up or down in the next year or five or ten years, the one thing I’m pretty sure of is it doesn’t multiply. There’s a magic to it, and people attach magic to lots of things.”
Buffett is not alone in his skepticism about bitcoin. His longtime business partner, Charlie Munger, has also expressed his negative views on the cryptocurrency. At the same annual meeting, Munger stated, “In my life I try to avoid things that are stupid, and evil, and make me look bad in comparison to somebody else… well bitcoin does all three. First, it’s stupid because it’s very likely to go to zero, second, it’s evil because it compromises the federal reserve system and the Nation Currency system. And lastly, China banned it, so we look more dumb then them.”
Both Buffett and Munger have long been proponents of investing in businesses that produce tangible value over the long term. Their skepticism about bitcoin stems from the fact that it does not have any inherent productive value and its future prospects are highly uncertain.
While some investors view bitcoin as a potential store of value or a hedge against inflation, Warren Buffett and Charlie Munger see it as a speculative investment with no inherent productive value. Their comments at the 2022 Berkshire Hathaway Annual Meeting highlight their belief in investing in assets that produce tangible value over the long term, and their skepticism about the long-term prospects of bitcoin. Whether you agree with their views or not, it’s always important to consider multiple perspectives before making investment decisions.
Editor’s note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates’ editorial team.
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