Warren Buffett Thinks Bitcoin Will "Come To Bad Endings"

Eileen GuzmanMay 10, 2018

Microsoft founder Bill Gates also chimed in on the issue, sharing Buffett's and Munger's opinions towards bitcoin. Buffett's main problem with cryptocurrencies is that they aren't productive assets.

The value of bitcoin took a dive after Warren Buffett renewed his criticism of the cryptocurrency - even evaluating it to rat poison.

He has previously said that cryptocurrencies "definitely will come to a bad ending".

Berkshire Hathaway Vice Chairman, Charlie Munger echoed the comments of Buffett. What Buffett means is that if you purchase bitcoin, you will never be able to produce anything of value from it. "It's kind of a pure "greater fool theory" type of investment", Gates shared speaking during CNBC's show "Squawk Box".

Over the past few weeks, Bitcoin and other cryptocurrencies have actually performed really well over the past few weeks, but have fallen once again after these comments were released. And to be fair, bitcoin and other cryptocurrencies had a hard weekend before Gates's comments. He went on to advise investors to invest in the stock market rather than gambling with Bitcoins or any other cryptocurrency.

Just as bitcoin was soaring back to five-figure levels (reaching US$9,932 on May 5), two of the world's richest people chose to bring it back down to Earth with a bump.

The comments were a reference to Warren Buffett's recent investment in Apple; during the interview, Gates was seated next to Buffett and Berkshire's vice chairman, Charlie Munger.

Buffett's company, Berkshire Hathaway, is the biggest shareholder in Wells Fargo, which has been mired in scandal for more than a year. Bill Gates, over the years, has had quite a complicated relationship with Apple.

He said investors now are much better off owning USA stocks, whose prices are elevated but not in a "bubble", and it would take a "nanosecond" for him to choose stocks over 10- or 30-year US government bonds now yielding around 3 percent. "The top tech companies do have a very strong profit position right now", Gates added.

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