{"id":51755,"date":"2018-05-14T15:49:55","date_gmt":"2018-05-14T22:49:55","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=51755"},"modified":"2019-11-07T02:56:06","modified_gmt":"2019-11-07T02:56:06","slug":"opinion-warren-buffett-is-wrong-about-bitcoin-and-thats-okay","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/opinion-warren-buffett-is-wrong-about-bitcoin-and-thats-okay\/","title":{"rendered":"Opinion: Warren Buffett is Wrong About Bitcoin, and That&#8217;s Okay"},"content":{"rendered":"<p>Cryptocurrencies took a beating at last week\u2019s Berkshire Hathaway annual shareholders meeting. In comments to <a href=\"http:\/\/money.cnn.com\/2018\/05\/07\/investing\/warren-buffett-bitcoin\/index.html\">CNBC<\/a> before the event, Berkshire Hathaway chairman and CEO, Warren Buffett, described Bitcoin as \u201cprobably rat poison squared.\u201d Unlike other famed investors like <a href=\"https:\/\/cryptoslate.com\/george-soros-crypto\/\">George Soros<\/a>, Buffett is a well-document skeptic of cryptocurrencies.<\/p>\n<p>In January, Buffett told CNBC:<\/p>\n<blockquote><p>\u201cIn terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending\u2026If I could buy a five-year put on every one of the cryptocurrencies, I\u2019d be glad to do it but I would never short a dime\u2019s worth.\u201d<\/p><\/blockquote>\n<p>Buffett's comments and those of his confidants are so strong because they see cryptocurrencies as a speculative commodity similar to gold or other metals. Instead, Buffett prefers stocks because they produce earnings and dividends, which serve as tangible identifiers for the investment product\u2019s worth.<\/p>\n<p>According to media at the event, Buffett\u2019s comments were relatively tempered compared to those made by Charlie Munger, Buffett\u2019s longtime collaborator. On stage at the event, Munger said:<\/p>\n<blockquote><p>\u201cTo me, it\u2019s just dementia. It\u2019s like somebody else is trading turds and you decide you can\u2019t be left out.\u201d<\/p><\/blockquote>\n<p>The two appear to take pleasure in being the defenders of the old-guard financial system, and their remarks carry a lot of weight. At the time of his comments, Bitcoin was approaching $10,000, but it retreated nearly 8% in the days after Buffett spoke. It\u2019s been hovering around $8,500 ever since.<\/p>\n<h2>Is Buffett Right?<\/h2>\n<p>Increasingly, Buffett and others who are staunchly opposed to digital currencies like Bitcoin are becoming pariahs in their field.<\/p>\n<p>In recent weeks, several mainstream financial institutions took steps toward integrating Bitcoin into their financial product offerings. <a href=\"https:\/\/cryptoslate.com\/goldman-sachs-confirms-launch-of-bitcoin-trading-desk\/\">Goldman Sachs announced<\/a> that it would open a Bitcoin trading desk, and The New York Times reported that Intercontinental Exchange, the parent company for The New York Stock Exchange, <a href=\"https:\/\/cryptoslate.com\/nyse-parent-company-may-be-launching-a-bitcoin-investment-platform\/\">is considering development<\/a> for a cryptocurrency trading platform.<\/p>\n<p>Of course, the crypto community is as ardent and enthusiastic as they come, and many took to Twitter to voice their disagreement.<\/p>\n<p>Even so, it\u2019s worth considering the reasoning behind Buffett\u2019s sentiment. Is it true that Bitcoin and other digital currencies are more akin to digital gold than viable investment products? Perhaps more importantly, is there a value proposition beyond our current crypto moment?<\/p>\n<h2>Weiss Ratings Offers a Counter-Narrative<\/h2>\n<p><a href=\"https:\/\/cryptoslate.com\/companies\/weiss-crypto-ratings\/\">Weiss Crypto Ratings<\/a>, an independent agency that provides letter grades for various cryptocurrencies, sees things differently. On Thursday, Martin Weiss, founder of Weiss Ratings, <a href=\"http:\/\/www.prweb.com\/releases\/2018\/05\/prweb15473238.htm\">disputed Buffett\u2019s assertions<\/a>, and he offered an alternative narrative that espoused the benefits of cryptocurrencies.<\/p>\n<p>Mr. Weiss believes that cryptocurrencies have value in three critical ways:<\/p>\n<h2>#1 Intrinsic Value<\/h2>\n<p>Blockchain technology and the ecosystems that it enables are increasingly becoming dominant forces at the enterprise and governmental level. With so many people actively pursuing blockchain adoption and integration, these platforms are significant drivers of value.<\/p>\n<p>Therefore, Weiss argues, cryptocurrencies are effectively a share in a particular blockchain platform. For example, for holders of Ether, their digital currencies become more valuable as the platform continues to proliferate. In this way, cryptocurrencies really aren\u2019t that much different than traditional stocks.<\/p>\n<h2>#2 Exchange Value<\/h2>\n<p>Cryptocurrencies are already popular, and their integration is nearly unanimously trending toward higher levels of adoption, not less. A simple supply and demand scenario indicates that cryptocurrencies are poised to increase in value rather than remaining stagnant. Even if demand subsides and their value decreases, they are still a fluid market, so Buffett\u2019s assertion that cryptocurrencies are effectively a static investment seems misguided or misunderstood.<\/p>\n<h2>#3 Monetary System<\/h2>\n<figure id=\"attachment_50809\" aria-describedby=\"caption-attachment-50809\" style=\"width: 300px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-50809\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/fedcoin-social-300x158.jpg\" alt=\"Former Top Official Said He Would Consider FedCoin to Rival Bitcoin\" width=\"300\" height=\"158\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/fedcoin-social-300x158.jpg 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/fedcoin-social-768x403.jpg 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/fedcoin-social-1024x538.jpg 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/fedcoin-social.jpg 1200w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><figcaption id=\"caption-attachment-50809\" class=\"wp-caption-text\">Related Story:\u00a0<a title=\"Former Top Official Said He Would Consider FedCoin to Rival Bitcoin\" href=\"https:\/\/cryptoslate.com\/former-top-official-said-he-would-consider-fedcoin-to-rival-bitcoin\/\">Former Top Official Said He Would Consider FedCoin to Rival Bitcoin<\/a><\/figcaption><\/figure>\n<p>The original use case for Bitcoin was as a facilitator of digital p2p transactions, and some digital currencies are already usable at checkout. However, it\u2019s also possible that a digital currency could play a role as a digital expression of <a href=\"https:\/\/cryptoslate.com\/former-top-official-said-he-would-consider-fedcoin-to-rival-bitcoin\/\">a national currency<\/a>, or it\u2019s possible that a private currency could gain widespread adoption as a payment system.<\/p>\n<p>As such, owning a cryptocurrency would be a viable way to participate in this ecosystem.<\/p>\n<h2>Popular Doesn\u2019t Mean Perfect<\/h2>\n<p>Ultimately, cryptocurrencies don\u2019t attain validity by the affirmation of every member of the financial elite. Throughout their torrid run, cryptocurrencies have been criticized by thought and industry leaders as well as government officials.<\/p>\n<p>Instead, it\u2019s crucial for cryptocurrency supporters to continue thinking critically about the formation of cryptocurrencies and supporting projects that they believe in.<\/p>\n<p>Unlike the established financial system, participants in the crypto movement have the opportunity to form and shape it into what they want it to become. By listening to contrarian voices like Warren Buffett, the community can gain valuable insight into some of cryptos shortcomings, but that still doesn\u2019t mean that he\u2019s right.<\/p>\n<p>Crypto will be fine with or without his endorsement, but his sentiments are not rat poison either.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Cryptocurrencies took a beating at last week\u2019s Berkshire Hathaway annual shareholders meeting. In comments to CNBC before the event, Berkshire Hathaway chairman and CEO, Warren Buffett, described Bitcoin as \u201cprobably rat poison squared.\u201d Unlike other famed investors like George Soros, Buffett is a well-document skeptic of cryptocurrencies. In January, Buffett told CNBC: \u201cIn terms of [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":54176,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Opinion: Warren Buffett is Wrong About Bitcoin, and That&#039;s Okay<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/opinion-warren-buffett-is-wrong-about-bitcoin-and-thats-okay\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Opinion: Warren Buffet is Wrong About Bitcoin, and That&#039;s Okay\" \/>\n<meta property=\"og:description\" content=\"Cryptocurrencies took a beating at last week\u2019s Berkshire Hathaway annual shareholders meeting. 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In January, Buffett told CNBC: \u201cIn terms of [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/opinion-warren-buffett-is-wrong-about-bitcoin-and-thats-okay\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2018-05-14T22:49:55+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-11-07T02:56:06+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2025\/11\/cryptoslate-cover.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Bill DeLisle\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Opinion: Warren Buffet is Wrong About Bitcoin, and That&#039;s Okay\" \/>\n<meta name=\"twitter:creator\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:site\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Bill DeLisle\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/cryptoslate.com\/opinion-warren-buffett-is-wrong-about-bitcoin-and-thats-okay\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/cryptoslate.com\/opinion-warren-buffett-is-wrong-about-bitcoin-and-thats-okay\/\"},\"author\":{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/bill-delisle\/#person\",\"name\":\"Bill DeLisle\",\"url\":\"https:\/\/cryptoslate.com\/author\/bill-delisle\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/bill-delisle\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/bill-delisle\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2017\/09\/cs-bill-d.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2017\/09\/cs-bill-d.jpg\",\"caption\":\"Bill DeLisle\"},\"description\":\"Bill is a writer who frequently covers cryptocurrency and the fintech movement. 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