How does Warren Buffet feel about crypto?
Warren Buffett isn’t a fan of cryptocurrency. He’s referred to Bitcoin as “rat poison squared” and essentially believes the whole idea of crypto is closer to gambling. His main issue is that crypto doesn’t actually produce anything. Instead crypto just sits there, hoping someone else will pay more for it later. From his point of view, that’s not investing, it’s speculation. And as someone who built his career investing in real businesses with real value, he’s just not a fan of the idea.
I think Warren Buffet makes some good points but also disregards some important aspects of crypto.
Firstly, you can use crypto to transfer money across country borders instantly. As a system of transfer, crypto sees a lot of use, especially in countries like China, where the amount of money you can transfer out is limited.
Second, Crypto can be used as a store of value, especially in economies where the currency is either volatile or failing.
Third, NFT’s and digital ownership. While NFT’s failed in many ways at first, widespread adoption of them could still be possible it would just need to be based around things that have more value such as video game items.
Finally some cryptos like Ethereum, let you program contracts that automatically run when certain conditions are met. This could be used for anything from renting a car to distributing royalties to musicians.