Revered investor and ‘Oracle of Omaha’, Warren Buffett, has delivered a one-two punch to the cryptocurrency sector, declaring the act of buying Bitcoin “is not investing”.
During an interview with Yahoo Finance, the Berkshire Hathaway chief executive followed up his previous statements on cryptocurrency where he declared the emerging asset class would come to a “bad ending”.
“We don’t own any, we’re not short any, we’ll never have a position in them,” he said at the time.
“I get into enough trouble with things I think I know something about. Why in the world should I take a long or short position in something I don’t know anything about.”
This time around, Buffett’s comments were more considered; he categorised cryptocurrencies such as Bitcoin as a speculation rather than an investment.
“There’s two kinds of items that people buy and think they’re investing. One really is investing and the other isn’t,” Buffett told Yahoo Finance.
“If you buy something like a farm, an apartment house, or an interest in a business … You can do that on a private basis … And it’s a perfectly satisfactory investment. You look at the investment itself to deliver the return to you.”
“Now, if you buy something like bitcoin or some cryptocurrency, you don’t really have anything that has produced anything. You’re just hoping the next guy pays more.”
That, Buffett says, is speculating. And while he says there’s “nothing wrong” with speculating, he still does not consider it investing.
“If you wanna gamble somebody else will come along and pay more money tomorrow, that’s one kind of game. That is not investing,” he says.
Bitcoin has long been a point of contention for the big players in the traditional finance space, with JP Morgan chief Jamie Dimon famously saying the digital currency was a “fraud”. However, the cryptocurrency world has also seen its fair share of support, with venture capitalists around the world expressing their confidence in the asset class.