Warren Buffet has let his thoughts be known in regards Bitcoin in the past, but his latest jibe sees him question the cryptocurrency’s true value.
The Berkshire Hathaway CEO and fifth-richest person in the world has been vocal in recent days, warning of further bank failures to come in the near future, but simultaneously expressing his confidence in the future of his company, when his successor Greg Abel takes over at the helm.
Perhaps the most eye-brow-raising takeaway from his interview with CNBC on Wednesday was his remarks on Bitcoin, which still reigns supreme as the world’s largest cryptocurrency by market capitalisation.
Of course, one of the most successful investors in modern history knows a thing or two about market opportunity, but his long-standing scepticism over crypto, and more specifically Bitcoin, was an echoed once more in a long line of damning remarks, which includes a rather grating comment in 2018 where he refereed to the coin as “rat poison squared.”
Speaking to CNBC’s Squawk Box on Wednesday, the 92-year-old said: “Bitcoin doesn’t have any intrinsic value, but that doesn’t stop people from wanting to play the roulette wheel.
“The urge to participate in something that looks like easy money is a human instinct which was always there.”
"#Bitcoin is a gambling token and it doesn't have any intrinsic value. But that doesn't stop people from wanting to play the roulette wheel," says Warren Buffett on #crypto. pic.twitter.com/6MQAiyrS5J
— Squawk Box (@SquawkCNBC) April 12, 2023
The implication that crypto investors are simply gambling on a volatile market was likened to the psychological tendency by actual bettors, who are fuelled by the fear of missing out, and as such, move hastily into poor investments.
Charlie Munger, who has been Buffet’s long-term vice chairman at Hathaway, is also of the same belief given the company’s overwhelming success in value investing. He said in a piece for the Wall Street Journal: “It’s a gambling contract with a nearly 100% edge for the house, entered into in a country where gambling contracts are traditionally regulated only by states that compete in laxity.
“The U.S. should now enact a new federal law that prevents this from happening.”
China moved to ban cryptocurrency in 2021 over fears of capital flight sidetracking its markets, although their official stance claimed it was to ensure economic stability.
