[kuros]

NOV 6, 2017 @ 09:15 AM 69,205

Why Buffett Sees Bitcoin Bubble

If something is "virtual," does it really exist? This question has haunted us since the beginning of our journey as Homo sapiens.

When it comes to Bitcoin and other cryptocurrencies, this is an important question. You can buy and sell stocks, bonds, paper currencies and commodities like corn and wheat. They exist in the real world. You can physically deliver them.

Which brings us to Warren Buffett, one of the greatest investors ever, who recently noted: “You can’t value bitcoin because it’s not a value-producing asset...it's a real bubble in that sort of thing.”

For those of you devoted to decoding Buffett's every pronouncement, his meaning is clear: Cryptocurrencies are not tangible investments. They don't generate earnings or pay dividends. How do you really value them if they have no intrinsic or "book" value? And people who buy bitcoin are simply betting that the price will go up.

The one powerful factor about currencies -- and even gold -- is that there's a finite amount of it. Well, that's mostly true, until governments start printing money, which begets inflation in many cases.

There's also said to be a finite amount of Bitcoin, although we still don't know much about how it's created or its mysterious creator. That's troubling.

Yet Buffet has a real concern. If you don't know what goes into something, meaning a lack of transparency, it can be snake oil. Here's Buffett's concern:

"It doesn't make sense. This thing is not regulated. I don't believe in this whole thing at all. I think it's going to implode."

http://www.forbes.com/sites/johnwasik/20...in-bubble/

[Ezio31]

He also bet on Trump losing November 2016. We know how that turned out

[kuros]

Yes, but politics was not his field of expertise however.

Bitcoin is hardly used by 30,000 people in the whole world.

The 110 billion dollars market capitalization of Bitcoin is completely absurd and it shows how a top of a bubble looks before bursting

[Vincent Chase]

Thanks for the clickbait title, is this CNN?

This is nothing than an 87 year old man commenting on technology. He was years late in investing in the tech sector (he passed on Amazon, Google and Apple) and he probably has no inkling on blockchain technology. It is not worth a thread.

[PolymathGuru]

(11-10-2017 03:11 PM)Vincent Chase Wrote:  

Thanks for the clickbait title, is this CNN?

This is nothing than an 87 year old man commenting on technology. He was years late in investing in the tech sector (he passed on Amazon, Google and Apple) and he probably has no inkling on blockchain technology. It is not worth a thread.

Forbes.

Never doubt an old man due to his age. A lot of successful tech companies exist on top of a graveyard of failed businesses.

[Biz]

Buffett is 87 years old, do you really think someone that specializes in extremely conservative investments would be comfortable with something as new and radical as BTC? He was in his late 60's when the internet came out... think about that

[Biz]

BTW, a big name calling bitcoin a bubble... SHOCKER

[ProGambler]

He also hates gold. He made his name in the 80s when any idiot could find value. He was good at making 5%, with the protection of the US military.

[Irish]

"what the fuck does Warren Buffet know anyway, bro?"

- Random dude on internet

[TooFineAPoint]

(11-10-2017 09:57 AM)kuros Wrote:  

Here's Buffett's concern:

"It doesn't make sense. This thing is not regulated"

Because if the state doesn't control it, nothing's ever worked. Oh wait...

Buffet is not prognosticating, he's angling.

[bgbusiness]

He didn't invest in Google, Facebook, Amazon, Apple, or any hot "tech" stocks that people didn't believe in.

Look at what happened, he regrets in NOT INVESTING he said.

I think Warren Buffet is the Godfather of investing right now, but he does miss some investments because he doesn't know much about it. He is a little bit too old fashioned.

I am personally feeling neutral on Bitcoin. I personally do think it's a bubble, but I don't think it's bad for short-term gambling.

[Pinocchio]

Buffet doesn’t understand the technology. Bitcoin is an unprecedented concept.

[RichieP]

He admits he doesn't understand technology and won't buy tech tocks. So you can imagine how far away he is from understanding crypto.

Guys like Buffet, Dalio etc have a zone of competence and while it is world-class it does not apply to everything. From what they've said publicly it looks like haven't taken the time to look at what crypto really is, or the market ecology - who the buyers and sellers are.

Remember, there are billionaires who are hugely bullish on crypto and BTC. Namely heavyweight tech investors like Mark Andreesen, Naval Ravikant, etc.

[debeguiled]

There is a lot of the "It's 2017" logical fallacy in this thread.

I hope for your sakes you are correct.

[RichieP]

Not "It's 2017" -- but rather "It's not what they know or are good at".

Buffet, Dalio, etc have core competencies and understand certain assets. Crypto is not one of them.

BTC and cryptos may well tank -- but these guys haven't even looked into what crypto really is, or who is buying it. They don't like it and they're skeptical. Fair enough, but weigh their opinion accordingly i.e. as someone very successful at X who is commenting on Y without researching it.

[debeguiled]

Like I said, I hope you are right.

[RichieP]

No need to hope - I'm saying they haven't researched it, and they don't understand it thoroughly. They admit that openly.

[SamuelBRoberts]

What don't they understand? They understand it perfectly.

The price is going up because of FOMOers and unregulated wash trading, as well as Bitfinex's use of Tether as a form of printing money to buy bitcoin. The instant this area gets regulated the bubble bursts and we're down to... well, I don't know where. 1K? 500$? 2k? I don't feel comfortable saying where.

[Kid Twist]

What'll be the reg? By the way, can you be gifted a BTC by your parents and not pay taxes?

[SamuelBRoberts]

(11-11-2017 09:19 PM)Kid Twist Wrote:  

What'll be the reg? By the way, can you be gifted a BTC by your parents and not pay taxes?

No wash trading. No trading by the exchanges themselves. No bucket shops. Basically regulate them like you would a real stock exchange.

[SamuelBRoberts]

BTW your parents can gift you a BTC the same way they can gift you a car.

[RatInTheWoods]

I always get advice from my Grandfather on how to fix my PC when it's broken too.

[yaku]

Quote:

There's also said to be a finite amount of Bitcoin, although we still don't know much about how it's created or its mysterious creator. That's troubling.

Probably best not to pay attention to an article/writer who clearly has no clue what he's talking about.

[Maciano]

I listen to good investors, and Buffet is the best of them. However, I don’t see much arguments here I haven’t heard or seen refuted over the years.

I don’t get why all these finance guys, gold bugs, bankers, economists etc., can’t just say: “hey, bitcoin is not for me. Pass” and leave it at that.

They just keep repeating the same stuff about tulips, Ponzis, bubble, whatever. The crypto space itself is getting worse and worse re bitcoin: the biggest threats come from our own scene at the moment.

Yet, here we are: bitcoin almost reached $8000 last week.

Some people seem to like it.

[kuros]

(11-10-2017 05:06 PM)PolymathGuru Wrote:  

Forbes.

Never doubt an old man due to his age. A lot of successful tech companies exist on top of a graveyard of failed businesses.

Warren Buffet also fore-saw correctly the Internet dotcom / tech bubble of 2000.

Remember that Google, Amazon and Facebook are three recent winners,
out of hundreds of thousands of dotcom / tech companies that collapsed and are now dust