Billionaire investor Warren Buffett was way ahead of a loud and growing chorus of bitcoin haters, and began questioning its viability five years ago.
The Berkshire Hathaway CEO made headlines this year for calling bitcoin “rat poison squared” but he first took on the digital currency at the company’s 2013 annual shareholder meeting, according to a review of CNBC archives.
“Of our $49 billion, we haven’t moved any to bitcoin,” Buffett said at the time, when the digital currency was trading near $130.
Berkshire Hathaway Vice Chairman Charlie Munger, Buffett’s long-time business partner, had kicked off the discussion that Saturday saying he had “no confidence whatsoever” in bitcoin becoming a universal currency. Buffett agreed, saying that was his “gut reaction.”
Buffett, whose net-worth is more than $80 billion, stepped up his criticism a year later and said it was neither a durable means of exchange nor a store of value.
“I would not be surprised if it’s not around in 10 or 20 years,” Buffett told CNBC at the 2014 annual shareholder meeting. “It’s not a currency, it does not meet the test of a currency.”
He called bitcoin a speculative kind of “Buck Rogers” phenomenon, and said people buy and sell them thinking they’ll go up or down, “just like they did with tulip bulbs.”
Buffett and Munger have invested in everything from Coca-Cola to Heinz ketchup to IBM computers to Dairy Queen and Duracell. The two have also backed insurance companies, media companies, railroads and real estate.
Days after the 2014 shareholder meeting, Buffett appeared on Squawk Box, and called bitcoin a “mirage.”
“Stay away from it, it’s a mirage basically,” he said. “The idea that it has some huge intrinsic value is just a joke in my view.”
Buffett joins business leaders Jamie Dimon and Bill Gates, economists Nouriel Roubini and Robert Shiller, and the fund managers Ray Dalio and Howard Marks among those who have questioned its legitimacy.
Four years after Buffett’s first public comments, bitcoin rallied to nearly $20,000 and gained more than 1,300 percent in 2017. Weeks after it hit its high, Buffett said he was still staying away.
“In terms of cryptocurrencies I can say almost with certainty they will come to a bad ending,” Buffett said. “When it happens or how I don’t know.”
Since Buffett first addressed bitcoin, its price has jumped more than 4,000 percent.
But more recently, the digital currency has nosedived 70 percent from its high and is down roughly 50 percent this year, trading near $6,100 Wednesday, according to CoinDesk. Even with the addition of bitcoin futures in December and the new possibility to short the market, Buffett said that Berkshire will “never have a position in it.”
Buffett told CNBC’s Becky Quick in May that it’s “probably rat poison squared.” Munger meanwhile called it a “turd,” adding that trading cryptocurrencies is “just dementia.”
With Berkshire’s 2018 annual meeting in the books, users can revisit the highlights in CNBC’s Warren Buffett Archive, which houses searchable video from 25 full annual meetings, going back to 1994, synchronized to 2600 pages of transcripts. The Warren Buffett Archive also includes 500 shorter-form videos arranged by topic, CNBC interviews, a Buffett Timeline, and a Berkshire Portfolio Tracker.
Source: Tech CNBC
Warren Buffett has been one of bitcoin's biggest haters since 2013