Cryptocurrencies may be touted as the next big thing, and investors worldwide might be scrambling to grab a piece of the pie, but billionaire investor Warren Buffett remains unconvinced; according to him, Bitcoin (BTC/USD) and its peers are headed for a crash.
Speaking to CNBC, Buffett outlined a dire prediction for crypto, stating:
“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,” he added.
Buffett’s comments come a day after JPMorgan Chase CEO Jamie Dimon, a fierce Bitcoin critic, admitted he regretted the comments he made in September last year, when he labeled Bitcoin a “fraud.” Dimon claimed last year that anyone investing in Bitcoin was “stupid” and would “pay the price for it one day.” Like Buffett, Dimon claimed cryptocurrencies were going to come to a bad ending:
“It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed.”
While the rising popularity of cryptocurrencies seems to have forced Dimon to retract his critical statements, Buffett remains skeptical.
The Berkshire Hathaway CEO clarified that his firm had zero interest in cryptocurrencies, and would not be taking a short position on Bitcoin futures.
“We don’t own any, we’re not short any, we’ll never have a position in them.”
Despite having predicted a dire fate for cryptocurrencies only moments ago, Buffett went on to admit that he knew little about them to begin with.
“I get into enough trouble with things I think I know something about,” he said. “Why in the world should I take a long or short position in something I don’t know anything about.”
Buffett has been slow to recognize the potential of tech companies (such as Google and Amazon) in the past, so there’s hope for cryptocurrency investors and enthusiasts yet.
Meanwhile, Buffett’s bearish stance on cryptocurrencies is hardly new; the ‘Oracle of Omaha’ has been issuing warnings about cryptocurrencies since 2014, when he dubbed Bitcoin a “mirage” in an interview with CNBC, warning investors to “stay away from it.” Buffett claimed back then that Bitcoin was nothing more than a way of transmitting money, much like checks and money orders.
“The idea that it has some huge intrinsic value is just a joke in my view,” he said.
He continued to lambast digital currencies last year; during a Q&A session held in Omaha, Nebraska, Buffett claimed it was impossible to value Bitcoin “because it’s not a value-producing asset.” He went on to term it a “real bubble,” claiming it was not possible to tell how high the price would go.