Warren Buffett gives his most comprehensive explanation of why he doesn’t believe in Bitcoin

Bitcoin has gained steady acceptance from the world of traditional finance and investing in recent years, but Warren Buffett sticks to his skeptical stance on Bitcoin.

He said at Berkshire Hathaway’s annual shareholder meeting on Saturday that it is not a productive asset nor does it produce anything tangible. Despite a shift in public perception about cryptocurrency, Buffett is still not buying it.

“Whether it goes up or down next year, or five or ten years, I don’t know. But the one thing I’m absolutely sure of is that it’s not producing anything,” Buffett said. “She has magic and people have associated magic with many things.”

Even bitcoin enthusiasts tend to view the cryptocurrency as a passive asset that investors buy and hold and hope to see an increase in price over a long period of time. Buffett himself has commented that “nobody” is short of bitcoin, everyone owns the currency for the long haul.

For the more sophisticated cryptocurrency investors, some currencies offer a way for them to use their cryptocurrency productively – either through lending or as collateral – to create additional wallet benefits. However, they are still young and very speculative and have not joined the mainstream like Bitcoin.

Buffett explained why he didn’t see the value in bitcoin, comparing it to things that generate other types of value.

“If you say…for 1% interest on all farmland in the United States, pay $25 billion to our group, I’ll write you a check this afternoon,” Buffett said. “[For] $25 billion I now own 1% of farmland. [If] You give me 1% of all condos in the country and you want another $25 billion, I’ll write you a check, it’s very simple. Now if you tell me you own all the bitcoin in the world and offer it to me for $25, I won’t take it because what am I going to do with it? I have to sell it back to you somehow. You won’t do anything. The apartments would rent and the farms would produce the food.”

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Investors have been for years Confused about how to value Bitcoin Partly because of its ability to serve different functions. In western markets, it has been established as an investment asset, particularly in the past year as rates and inflation have been on the rise. In other markets, people still see huge potential to use it as digital cash.

“An asset, in order to have value, has to give something to someone. And there is only one coin accepted. You can come up with all sorts of things – we can put up Berkshire coins … But in the end, that’s money,” he said, holding up a $20 note. “And there is no reason in the world that the United States government…would allow Berkshire’s money to replace their money.”

Both Buffett and Charlie Munger have made hostile comments toward Bitcoin in the past. Most famously, Buffett said bitcoin “may be a rat poison square.” Munger doubled down on that sentiment on Saturday.

“In my life, I try to avoid things that are stupid, evil, and make me look bad compared to someone else — and bitcoin does all three things,” Munger said. “First of all, it’s stupid because it still could potentially go to zero. It’s evil because it undermines the Federal Reserve system… and thirdly, it makes us look fools compared to the communist leader in China. He was smart enough to ban Bitcoin in China.”

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