The entrepreneur, whose net worth is estimated at $100 billion, says people buying bitcoin hope ‘the next guy will pay more’.
Buying bitcoin is akin to speculation and gambling, but it’s not investing, believes Buffett. He shared his opinion in an interview with Yahoo Finance on the eve of Berkshire Hathaway’s annual shareholder gathering that will take place in Omaha, Nevada.
Buffett reckons “there’s two kinds of items that people buy and think they’re investing. One really is investing and the other isn’t.” He files bitcoin under the second kind.
“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,” said Buffett.
He added he has nothing against digital money. But one has to distinguish between investing and gambling.
When acquiring bitcoin, Buffett added, “you aren’t investing… 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.”
Earlier, Buffett repeatedly stated that bitcoin is a financial bubble. He doesn’t invest in cryptocurrency, because he doesn’t understand the industry. At the same time he is certain that digital assets will “end up badly”.