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Bitcoin flash crash makes Warren Buffett right to some extent

The world’s most famous investor thinks bitcoin and cryptocurrency cannot be considered a form of money.

Warren Buffett
Photo By "CNBC"

The past month and a half have been a bumpy ride for Bitcoin. After a much bully first quarter of 2021 with $63000/ unit in mid-April, bitcoin is trading at $45000. The price of it has crashed roughly 15%. But what would the world’s most famous investor Warren Buffett say about those who are thinking of firing their investment apps?

It is probably a rat poison squaring for him. Buffett chose not to comment on the cryptos during his company’s annual shareholders meeting. The vice-chairman of Berkshire Hathaway, Charlie Munger, did not go deeper on this subject.

“I don’t welcome a currency that’s so useful to kidnappers and extortionists,” Munger said during the meeting’s much-watched Q&A session. “The whole damn development is disgusting and contrary to the interests of civilization.”

Warren Buffett has shared his remarks on bitcoin earlier. He does not have any bitcoin, and he does not own any cryptos. He specified that he would never own one. Buffett thinks it has no unique value. He does not like Bitcoins as he thinks it is an unproductive asset.

He said, “They don’t reproduce, they can’t mail you a check, they can’t do anything, and what you hope is that somebody else comes along and pays you more money for them later on, but then that person’s got the problem.”

Though bitcoin offers real value as a payment system, it also has some limitations. Moreover, he does not think of crypto as money. He thinks it does not meet the three criteria of money; rather, it is a ‘mirage’ for him. Cryptos do not meet the test of a currency. He added that he did not understand it. He became one of the most successful investors in history. He just sticks to stocks which he understands better.

Does he think that if he ever gets in trouble with something that he knows well, then why should he take a position in something that he does not know?

The billionaire has followed the value of an investment strategy. It focuses on buying stocks that are having undervalued. His firm looks for companies with good profit margins and those who offer services that cannot be substituted easily.

While bitcoin has many people rich, that does not mean that one should jump into it. Listening to Buffett’s word of wisdom and focusing on assets that produce hard cash can help better.

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