Oracle of Omaha Warren Buffett is turning heads again, labelling popular cryptocurrency Bitcoin as “probably rat poison squared”.
In what has become a long series of swipes at digital currencies from the investment tycoon, Buffet has launched another attack on cryptocurrencies and their investors, and, reflecting his status in the investment world, Bitcoin’s price fell nearly 6% a day later.
The “rat poison” comment, made just prior to the Berkshire Hathaway 2018 annual shareholder meeting last Saturday, was a prelude of things to come, as Buffett spent much of the meeting discussing the emerging asset class, saying they will come to “bad endings”.
“When you buy something because you are hoping tomorrow morning you’re going to wake up and the price will be higher, you need more people coming into it than are leaving,” he said.
“And you get that and it will feed off itself for a while, and sometimes for a long while, and sometimes to extraordinary numbers, but they come to bad endings, and cryptocurrencies will come to bad endings,” Buffett said.
“It is something where people who are of less-than-stellar character see an opportunity to clip people who were trying to get rich because their neighbor’s getting rich buying this stuff neither one of them understands. It will come to a bad ending.”
Buffett put cryptocurrencies in his sights only two weeks ago in an interview with Yahoo Finance, in which he described buying cryptocurrency as not real investing.
Charlie Munger, a long-time business partner of Buffett and co-chair of Berkshire Hathaway, pulled his punches even less in the annual meeting.
“I like cryptocurrencies a lot less than you do,” Munger said to Buffett.
“To me, it’s just dementia. It’s like somebody else is trading turds and you decide you can’t be left out,” he said.
Bitcoin is currently worth $AUD12,518 per unit.