Warren Buffett, Berkshire Hathaway Chairman, is pretty much sure that Bitcoin, whether it goes up or down in the next year, five years, or 10-years, doesn’t produce anything. He reiterated that the world’s most popular cryptocurrency is “not a productive asset and doesn’t produce anything tangible”.
Addressing the Berkshire Hathaway Annual Shareholder meeting on Saturday, Buffett highlighted that despite the shift in public perception about Bitcoin, he still wouldn’t buy it. The crypto skeptic said BTC’s got a magic to it and people have attached magics to lots of things.
Besides critics, some crypto enthusiasts also regard cryptocurrency as a passive asset that investors buy and hold for price gain over a long period. Buffett said there’s nobody that’s short on Bitcoin as everyone is a long-term holder. For sophisticated crypto investors, some cryptocurrencies offer a way for them to use it productively. They can either lend it or use it as collateral to create additional portfolio benefits. But these altcoins are still quite young, highly speculative, and haven’t entered the mainstream like the popular Bitcoin.
Buffett explained that if a person owns all the Bitcoin in the world and offered it to him for $25, he wouldn’t take it. He asked what would he do with it. Buffett says it isn’t going to do anything like apartments produce rent and farms produce food. Investors are confused about how to value Bitcoin because of its potential to serve different functions. In the Western markets, the popular crypto has been established as an investment asset as rates and inflation have been on the rise. People, in other markets, use it as digital cash.
The Berkshire Hathaway chair believes that to have value, assets have to deliver something to somebody. Previously, Buffett had described Bitcoin as “probably rat poison squared”.