In a short period of time, cryptocurrency has risen from relative obscurity to being covered by major news outlets like CNN and CNBC. At press time, the total crypto market is worth well over $334,000,000,000 – yeah that’s a lot of zeros.
While these new currencies and the technology behind them appear to have begun their march toward mainstream acceptance –there are still some very high profile investors and business leaders who aren’t ready to jump on the bandwagon just yet. We’ll call them crypto critics.
One of the most well-known crypto critics is “The Oracle of Omaha” Warren Buffett. Buffett is the CEO of the investment firm Berkshire Hathaway. His buy and hold investment strategy has helped him achieve a net worth of around $82.8 billion.
Last January, Buffett told CNBC,
“In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending … When it happens or how or anything else I don’t know.”
More recently, in an interview with Yahoo Finance last April, “The Oracle” went into a little more detail as to why he’s not sold on cryptocurrency. Buffett explained,
“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. 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.”
“You aren’t investing when you do that. 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.”
However, Buffett hasn’t always been quick to get behind new technology or companies that utilize it. He has admitted his past decisions not to invest in stocks like Google and Amazon were mistakes.
Another Berkshire Hathaway executive, Charlie Munger, can also be counted among the cryptocurrency skeptics. In a recent interview, Munger went on the record stating,
“Bitcoin is worthless, artificial gold. Now that is not something I think the world needs.”
He went on to say,
“The fact that its clever computer science doesn’t mean it should be widely used, and that respectable people should encourage other people to speculate on it,” he said. “Bitcoin reminds me of Oscar Wilde’s definition of fox hunting: ‘The pursuit of the uneatable by the unspeakable.’”
Other crypto critics
Outside of Berkshire Hathaway, other business leaders like JPMorgan Chase CEO Jamie Dimon have been outspoken crypto critics. At a financial conference back in 2016, Dimon compared Bitcoin to the strange tulip craze that swept the Netherlands in the 1600s.
Ray Dalio, the founder of the world’s largest hedge fund, Bridgewater Associates, was quoted as saying,
“It’s not an effective (store) of wealth because it has volatility to it, unlike gold. Bitcoin is a highly speculative market. Bitcoin is a bubble.”
Is this is a case of established business leaders being slow to adapt to change or are their assessments correct?