The past year has been groundbreaking for Bitcoin. And just recently the cryptocurrency hit an all-time high: Over $61,000 for one unit — late-to-the-party investors bemoaned having missed out.
So what does the world’s most famous investor think of Bitcoin?
It’s “probably rat poison squared,” Warren Buffett once said.
If you listen to the billionaire, cryptocurrency may not be the big financial opportunity you’ve been dreaming of, nor is it the only way to get impressive returns if you have some cash you’re looking to put into the market. That’s what commission-free investing apps are for.
“I don’t have any Bitcoin. I don’t own any cryptocurrency, I never will,” he told CNBC in 2020.
Here are three reasons Buffett won’t go near it.
1. It has ‘no unique value at all’
The billionaire investor doesn’t like Bitcoin because he considers it an unproductive asset.
Buffett has a well-known preference for stocks of corporations whose value — and cash flow — come from producing things. But cryptocurrencies don’t have real value, Buffett said in a CNBC interview in 2020.
“They don’t reproduce, they can’t mail you a check, they can’t do anything, and what you hope is that somebody else comes along and pays you more money for them later on, but then that person’s got the problem.”
Though Bitcoin is intended to provide real value as a payment system, that use is still pretty limited. As Buffett sees it, Bitcoin’s value comes from the optimism that someone else will be willing to pay more for it in the future than you’re paying today.
2. He doesn’t think crypto counts as money
As a tradeable asset, Bitcoin boomed. But does it meet the three criteria of money? According to the most common definition, money is supposed to be a means of exchange, a store of value, and a unit of account.
But Buffett calls it a “mirage.”
“It does not meet the test of a currency,” the billionaire said on CNBC in 2014. “It is not a durable means of exchange, it’s not a store of value.”