Screenshot from CNBC interview with Warren Buffett.
Although hardly an endorsement of Bitcoin, it’s worth noting the context in which Buffett’s comments were made. Recalling his first investments during World War II, Buffett was explaining the relatively values of stocks versus currency. In times of economic stress, Buffett said, American businesses will be worth more, while the printed money in circulation will be worth less. “You’ll be much better off owning productive assets over the next 50 years than you will be holding pieces of paper or, I’m not sure, Bitcoins.”
In effect, Buffett was claiming that owning currency, real or virtual, is never as good as owning a real asset, such as stock in a thriving company. To anyone following Buffett’s investment history, this statement is hardly surprising.
It’s worth noting that Buffett’s dismissal of Bitcoin seems to be rooted in a very limited understanding of what virtual currencies are. Buffet followed up his earlier statement with this commentary on Bitcoin from an investment perspective.
“It’s not a durable means of exchange,” Buffett said. “It’s not a store of value. It’s been a very speculative, Buck Rodgers type thing. People buy or sell them because they hope it will go up or down.”
It’s clear that Buffett doesn’t see Bitcoin as an alternative framework for payments and banking, for instance, but simply as another speculative bubble.
