Bitcoin Vs. Berkshire: The $630,000 bet

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When Warren Buffett warned investors to “stay away” from the “mirage” of bitcoin on Friday, he probably didn’t realize that he was throwing down a gauntlet to cryptocurrency investors everywhere. The iconic brain behind Berkshire Hathaway’s success doesn’t see bitcoin as anything other than a “very fast money order,” and not as a highly disruptive rival to the credit and banking industry.

But Mircea Popescu doesn’t agree. The controversial owner of MPEx is, if nothing else, a true believer in the future of bitcoin. And he’s willing to put his money where his mouth is. A lot of money. 1000 BTC, in fact, which is just over $630,000 at current rates.

Posting on popular betting site BitBet, Popescu proposed the following high-stakes wager:

Berkshire Hathaway (BRK-A) recently traded above $185,000 per share.

The retrospective 30-day average USD price per Bitcoin was 591.97451730 BTC according to Bitstamp and 581.75152994 BTC according to BTC-e which on a volume basis average to 588.052722483 USD per BTC.

This means the value of one BRK-A share in Bitcoin is currently around 314.59764223 BTC.

This bet resolves as No if the NYSE:BRK-A share trades at all points during normal trading hours on March 16th, 2015 over the USD value of 314.59764223 Bitcoin, calculated by taking the 30-day price average of the top two Bitcoin exchanges active on March 13th ( excluding known scams bucket shops and any other fictitious entities ) and averaging them on a volume basis for the past 30 days.

This bet resolves as Yes otherwise.

Given the terms, it would be hard for Popescu to actually lose the wager. Bitcoin is primed to grow substantially this year, while Berkshire Hathaway is the definition of a conservative, if high-performing, stock. Buffett himself noted that Berkshire is likely to underperform this year thanks to the rebound in the economy, further stacking the deck in Popescu’s favor. The bet closes on February 15, 2015, and thus far only 10 BTC have been wagered against it.

And even if Popescu does lose and bitcoin doesn’t outperform Buffett’s company, he still wins, at least in a sense. After all, the bet is great publicity for BitBet, which is co-owned by Popescu.

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