Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., smiles during a Bloomberg Television Interview in New York, U.S., on Wednesday, April 23, 2014. Buffett discussed the possibility of his company eventually becoming more involved in housing finance once lawmakers resolve future of Fannie and Freddie. Photographer: Chris Goodney/Bloomberg *** Local Caption *** Warren Buffett

Warren Buffet, the 87-year-old CEO of Berkshire Hathaway is widely regarded as one of the most successful investors ever. His company Berkshire Hathaway is the 8th largest company by revenue in the world, a company that Buffet owns 36.8% in equity. So, therefore, his recent remarks about Bitcoin have come as another stinging blow to the cryptocurrency community.

In an interview with Yahoo Finance on April the 28th, Buffet said, ‘”There’s two kinds of items that people buy and think they’re investing,” he said. “One really is investing and the other isn’t.”

He then expanded on this by saying:

“If you buy something like a farm, an apartment house, or 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.”

He then claimed that because of this, Bitcoin investments are speculative and simply a ‘gamble’ or a ‘game’ and that ‘no one really knows exactly what [Bitcoin] is.’

Buffet’s stance has been unchanged since 2014 when he called Bitcoin a ‘mirage’ on CNBC. He’s also used the argument that Bitcoin is a ‘bubble’ and he claimed that it’s not a value accruing asset.

This anti-crypto position is mirrored by the vice-chairman of Berkshire Hathaway Charlie Munger who called investing in Bitcoin, ‘simply disgusting.’

Although Buffet’s position may be surprising to some, it may come from his ideas and investing philosophy. Buffet has always preached that one should not invest in something they do not understand. Buffet has publicly said that cryptocurrencies are, ‘something that I don’t know anything about.’ This may explain his position, as he doesn’t know about blockchain and its intrinsic value.

Buffet has previously declined to invest in technology like Amazon and Google because he didn’t understand it, thus missing out on long-term financial gains. Therefore, we can only hope that he is wrong and that cryptocurrencies are an investment that he will once again miss out on. In terms of future claims about Bitcoin, it may be pertinent to suggest that people refrain from commenting on something they don’t understand.

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