Renowned investor Warren Buffett has claimed that buying bitcoin and other cryptocurrency is closer to gambling than investing.
Mr Buffett, whose personal wealth is only surpassed by Microsoft founder Bill Gates and Amazon founder Jeff Bezos, is a long-time sceptic of bitcoin and remains unconvinced by the virtual currency despite its considerable gains over the last year.
“There’s two kinds of items that people buy and think they’re investing. One really is investing and the other isn’t,” the 87-year-old head of Berkshire Hathaway said ahead of the company’s annual shareholder meeting.
“If you buy something like a farm, an apartment house, or an interest in a business… you can do that on a private basis… and it’s a perfectly satisfactory investment… Now, if you buy something like bitcoin or some cryptocurrency, you don’t really have anything that has produced anything. You’re just hoping the next guy pays more.”
In the interview with Yahoo Finance, Mr Buffett also labelled bitcoin a “game” and a “gamble,” adding: “You aren’t investing when you [buy bitcoin], you’re speculating.”
Mr Buffett’s latest comments follow more than four years of warnings about bitcoin, after first dismissing the cryptocurrecny as a “mirage” in 2014.
At the time, one bitcoin was worth around $600, however several years of steadily increasing prices saw its value double within three years.
When the price of the world’s most valuable cryptocurrency subsequently surged to around $20,000 in late 2017, Mr Buffett warned that its price was a “real bubble,” claiming that it has no intrinsic value.
“In terms of cryptocurrencies, generally, I can almost say with certainty that they will come to a bad ending,” Mr Buffett said in January.
In the same interview with CNBC, Mr Buffett admitted that he would never bet on the price of bitcoin falling as he did not understand how the market works.
“Why in the world should I take a long or short position of something I don’t know anything about?” Mr Buffett said. “I have 11 schools coming on Friday [and] the questions will be on bitcoin, and I won’t know the answers.”
Register for free to continue reading
Registration is a free and easy way to support our truly independent journalism
By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists
Already have an account? sign in
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies