The fact that you made a couple of bucks buying and selling Bitcoin doesn’t make it a true investment. At least not for Warren Buffett, one of the world’s most renowned investors.
The 87-year-old chairman and CEO of Berkshire Hathaway believes cryptocurrencies are purely speculative and therefore, they shouldn’t be called an investment.
“You look at the investment itself to deliver the return to you. 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,” said Buffet in an interview with Yahoo Finance.
This is not the first time Buffet puts under scrutiny the viability of the crypto market. When Bitcoin hit $20,000 per unit in January 2017, the Oracle of Omaha warned that the cryptocurrency was a “real bubble”, assuring its future remained extremely cloudy.
“You’re speculating. There’s nothing wrong with it. If you wanna gamble somebody else will come along and pay more money tomorrow, that’s one kind of game. That is not investing.”
One of his main arguments against Bitcoin is that nobody really seem to understand what it is. He even admitted to CNBC lately that he did not understand the mechanics of the market.
While the investment guru recognizes not having enough knowledge about cryptocurrencies, he was able to forecast that “that they will come to a bad ending” within the next five years.
Fine… short in the long run. But what about now?
On Monday, digital currencies opened mostly unchanged, with market participants closely monitoring relevant levels ahead for Bitcoin following April’s $3,000 gain.
An important analysts suggested earlier this week that Bitcoin is looking ahead to key psychological and technical levels. Breaking those would open the doors to further gains.
“From a technical standpoint, there is some resistance that will put the asset [Bitcoin] to the test,” Think Markets Chief Market Analysts Naeem Aslam wrote in a note.
And he added: “But a move above $10K could be very explosive and that would open the floor towards the $15K mark.”
According to Investopedia, “an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit.”
Now it’s time you make your own conclusion: is Bitcoin an investment or is it a game?