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Thread: Warren Buffett on Bitcoin

  1. #1

    Default Warren Buffett on Bitcoin

    https://www.cnbc.com/2018/05/01/warr...nvestment.html

    When it comes to bitcoin, billionaire investor Warren Buffett wants to make one thing clear: Unlike buying stocks, bonds or real estate, buying bitcoin is not an investment.

    That's because it lacks intrinsic value, Buffett says.

    "If you buy something like bitcoin or some cryptocurrency, you don't have anything that is producing anything," Buffett says in an interview with Yahoo Finance. "You're just hoping the next guy pays more. And you only feel you'll find the next guy to pay more if he thinks he's going to find someone that's going to pay more.

    "You aren't investing when you do that, you're speculating."


    Famous for his "buy and hold" investment strategy, the Berkshire Hathaway CEO built his company and his $82.8 billion net worth backing companies that have substantive value.

    "Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio's market value," Buffett wrote in his 1996 letter to shareholders. "If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes."

    To be an investment, what you're buying has to be worth something on its own, Buffett says.

    For example, "If you buy something [like] a farm, an apartment house or an interest in a business and look to the asset itself to determine whether you've done something what the farm produces, what the business earns ... it's a perfectly satisfactory investment," Buffett explains to Yahoo Finance. "You look at the investment itself to deliver the return to you.

    "If you ban trading in farms, you could still buy farms, and have a perfectly decent investment," Buffett says.

    Bitcoin, however, only increases in value by being bought and sold, he argues. Its value comes from what people are willing to pay.

    "[I]f you ban trading in ... bitcoin, which nobody knows exactly what it is, people would say, 'Well why in the world would I buy it?'"

    The Oracle of Omaha has held this opinion since at least 2014, when he told CNBC of cryptocurrencies, "It's a mirage basically."

    "The idea that it has some huge intrinsic value is just a joke in my view," Buffett said.

    In 2017, bitcoin soared from below $1,000 at the start of the year to over $19,000 in December, catching the attention of everyone from J.P. Morgan Chase CEO Jamie Dimon to NFL players. Tuesday, bitcoin traded near $8,900 according to CoinDesk's price index.

    Buffett sees a bleak future for the digital currency.

    "In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending," Buffett told CNBC in January. "When it happens or how or anything else, I don't know."

    Of course, Buffett has been wrong about backing new technologies before. He missed opportunities to invest in Google and Amazon, decisions he now calls mistakes.

    "I did not think [founder Jeff Bezos] could succeed on the scale he has," Buffett said to shareholders in May 2017.

    Crypto-enthusiasts argue that Buffet doesn't understand blockchain-based coins, and he has admitted as much.

    Still, many other investing experts like CNBC's Jim Cramer, Kevin O'Leary and Tony Robbins, also call buying cryptocurrencies a gamble. They suggest thinking of it like rolling the dice in Las Vegas.

    "As long as you can afford to lose everything you put into it, go with it," O'Leary told CNBC Make It in December, 2017.

    That mindset is alright with Buffett.

    "There's nothing wrong with it if you want to gamble [that] somebody else will come along and pay you more money tomorrow," Buffett tells Yahoo Finance. "That's one kind of game. That is not investing."
    Quote Originally Posted by NorthCarolinaLiberty View Post

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  3. #2

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    BTC isn't supposed to be an "investment". It's a currency. People hoping to profit with BTC are speculators, not investors.
    Quote Originally Posted by Torchbearer
    what works can never be discussed online. there is only one language the government understands, and until the people start speaking it by the magazine full... things will remain the same.
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  4. #3

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    Quote Originally Posted by heavenlyboy34 View Post
    BTC isn't supposed to be an "investment". It's a currency. People hoping to profit with BTC are speculators, not investors.
    A currency is used to make purchases or to pay wages with. Bitcoin buyers aren't typically using it for that. Do you buy bitcoin to spend it or to hope it goes up in value and you profit from that?

    Unless it becomes easier to use than cash or other alternatives, it will remain stuck with investors and enthusiasts. Hard to be easier than something like ApplePay where you tap your phone to the payment machine and you are done. You don't even have to sign anymore.

    https://www.cnet.com/news/bitcoin-cr...ng-a-sandwich/

    Bitcoin: Big in investing, but still lousy for buying a sandwich

    Cryptocurrencies so far haven't lived up to their promise as digital cash for buying goods and services. Whether that happens someday is anyone's guess.

    Ever the tech enthusiast, Bert Green decided to start accepting bitcoin at his Chicago storefront in 2013, becoming one of the first art galleries in the US to accept the digital currency as payment.

    Things didn't work out as planned.

    "It's hardly ever happened," he said, recalling just two sales using the cryptocurrency over the past four years at his gallery, Bert Green Fine Art. "People do not transact in bitcoin."

    Green's experience isn't unique. Despite bitcoin and other digital currencies being billed as -- you know -- currencies, they've instead turned into investment vehicles or stores of wealth. That shift appears to have sped up last year, when bitcoin's price skyrocketed from $1,000 last February to nearly $20,000 by December -- causing cryptocurrency to become a topic at the family dinner table.

    This lack of spending with cryptocurrencies could limit their future potential. Bitcoin, ethereum and other digital currencies may remain in the realm of investors and crypto enthusiasts, instead of becoming long-sought universal monies that people use every day and can be spent at any store or website around the world.

    Even after bitcoin's price tumbled this year, chances that it could reach that promise are anyone's guess.

    "That is the $64,000 question, that is, what's the next narrative for bitcoin?" said Nick Colas, co-founder of the independent research firm DataTrek Research, who's been following cryptocurrencies since 2012. "It's really hard to pin down and that's why the price is so volatile."

    The headaches of bitcoin lunch

    Things weren't always this way. Back in 2013, bitcoin was being trumpeted as the next, new currency, unfettered by governments, easily movable across borders and anonymous for users.

    Looking to take part in this new concept, Kashmir Hill, now a senior reporter in San Francisco for Gizmodo Media Group, spent a week that year living solely on bitcoin, writing about her experience for Forbes. It was a giant pain just finding retailers that would accept the currency.

    She did the same experiment a year later and found more retailers accepted the digital tokens, but she bumped up against plenty of other problems. One day, she tried to buy lunch at a local market that accepted bitcoin. Her payment didn't go through so she left starving, she said. The transaction completed about two hours later and she had to go back the next day to get her meal.

    "In my experience, bitcoin was so annoying that it was hard to imagine it becoming easier than going to the local ATM and getting money," she said.

    In another situation, Hill said she bought a bunch of strangers dinner at a sushi restaurant in 2013 for 10 bitcoin, the equivalent at the time of $1,200. The price of those bitcoin today would be roughly $93,000.

    "I just don't know how I could again spend this currency that could be worth so much more," she added. "I think I would be going crazy while doing it."

    Hill's experiment revealed a bunch of annoyances with spending with bitcoin. It's only accepted in a small fraction of retailers, and using it to buy stuff isn't all that simple, often requiring sending funds from one digital wallet to another using an online address called a public key. Plus, cryptocurrency fans don't want to part with their digital tokens for fear they'll miss out on the next big run-up in prices.

    One of the best-known examples of missed opportunities with bitcoin came from one of the earliest transactions using the currency. In 2010, when bitcoin was worth a fraction of a penny, Florida software programmer Laszlo Hanyecz agreed to pay someone 10,000 bitcoin for two Papa John's pizzas.

    "Those are the two most expensive pizzas in the history of the planet," Colas said. (This week, they'd be worth approximately $93 million -- or $46.5 million per pie.)

    With so few people agreeing to part ways with their bitcoin, some retailers have stopped accepting it. The gaming company Valve in December said it would stop taking the currency on its Steam service, citing its high fees and volatility. OKCupid, too, dropped bitcoin, saying a tiny percentage of people used it on the dating site.

    The e-retailer Overstock.com started accepting bitcoin in 2013 and now takes dozens of cryptocurrencies as payment, including Dash, Monero and litecoin. Despite that, the company said roughly 0.25 percent of its revenue comes from purchases using cryptocurrencies.

    Julian Plyter, co-founder and CEO of the Manhattan ice-cream sandwich shop Melt, said his business has made just 75 transactions with bitcoin between 2014 and 2017. But, he added, many of those transactions were with journalists curious how bitcoin buying works.
    More at link.
    Last edited by Zippyjuan; 05-01-2018 at 02:13 PM.
    Quote Originally Posted by NorthCarolinaLiberty View Post

    Half the crap I write here is just to entertain myself.
    I am Zippy and I approve of this post. But you don't have to.

  5. #4

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    Sounds like an endorsement.
    "He's talkin' to his gut like it's a person!!" -me
    "dumpster diving isn't professional." - angelatc


    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

    "Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

  6. #5

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    Pretty much how I feel about all the bull$#@! stocks that are companies that do not really produce anything of value, some of which buffett buys and drives the price up .
    Do something Danke

  7. #6

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    Quote Originally Posted by oyarde View Post
    Pretty much how I feel about all the bull$#@! stocks that are companies that do not really produce anything of value, some of which buffett buys and drives the price up .
    Buffet tends to avoid stocks in companies not showing any growth or profits.
    Quote Originally Posted by NorthCarolinaLiberty View Post

    Half the crap I write here is just to entertain myself.
    I am Zippy and I approve of this post. But you don't have to.

  8. #7

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    Quote Originally Posted by Zippyjuan View Post
    Buffet tends to avoid stocks in companies not showing any growth or profits.
    I remember them running up Netflix , what does netflix make ? about the same nothing as bitcoin . Yes , he made money off of it , he could have with bitcoin as well .
    Do something Danke






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