Warren Buffett: Reasons You Should Always Avoid Investing In Bitcoin
“I would be willing to purchase a five-year put on every crypto asset out there, but I’d never short even a penny.” — Warren Buffett.
With the renowned crypto holder and Berkshire Hathaway CEO Warren Buffett set to retire this year, let’s take another look at his reluctance to invest in BTC.
Keep in mind the persona of Warren Buffett, often depicted as a charming old-school crypto holder simply buying reliable stocks like one buys fast food or televisions! In reality, he resembles influential figures like George Soros, Stanley Druckenmiller who famously “broke the Bank of England,” or Paul Tudor Jones.
Late last year, when discussing his thoughts on BTC, he remarked, “I’ve witnessed people act foolishly throughout my life.”
Savage and candid, the old-timer.
Whether you love him or not, Buffett stands as the most accomplished trader of all time, so let’s explore why he refrains from investing in BTC:
Warren Buffett Asserts You Cannot “Analyze Fundamentals in the Crypto Sector?”
Buffett’s investment strategy is refreshingly straightforward: identify what generates profit (PE Ratios), grasp its mechanics, and only invest if it’s undervalued. He focuses on companies with transparent models, stable returns, and competent leadership.
This approach hits a stumbling block with crypto, where valuation is less clear-cut than traditional fundamentals. Buffett has been forthright—he doesn’t comprehend it, lacks interest, and sees no rationale for anyone else to.
(Source)
However, there’s a method to assess a crypto asset accurately; it starts with these inquiries:
- Is there actual usage of this crypto token?
- If it isn’t used now, might it have future applications?
- Is the team skilled?
- What’s the level of activity on GitHub?
- Do developers have incentives ($$$) to maintain this project?
You can’t foresight the future, but you can analyze potential use cases.
Is it Accurate to Call Bitcoin Fake Internet Currency?
Buffett has asserted this previously and is likely correct to an extent. Over 90% of cryptocurrencies may ultimately result in either crashing or a slow decline.
Bitcoin is a form of virtual currency. However, it’s not any less genuine or speculative than the money generated by central banks. They print currency in often speculative manners for governmental aims, diminishing the value of your savings.
At its core, Bitcoin symbolizes a withdrawal from inflationary monetary systems.
Since it serves purposes beyond speculation and provides economic value, it is certainly much more than simply “fake internet money.”
Why Does Warren Buffett Refuse to Short Bitcoin?
In a CNBC article from 2018, Warren Buffett elucidated why he would never short Bitcoin: “Why on earth should I take a position, long or short, in something I’m not knowledgeable about?”
Buffett remains entrenched in the mindset that generated his fortune, and who can fault him? He didn’t invest in any companies from the information age until 2016. It will still take time before distributed ledger technology gains enough public significance for traditionalists like him to endorse it wisely.
What Is Buffett’s Stance on Gold?
Warren Buffett recently described gold and silver as “unproductive” and labeled their holders as “entitled.”
Perhaps this is a point of agreement between him and cryptocurrency enthusiasts. BTC has historically yielded superior returns compared to gold since 2013 and will potentially continue to capture gold’s trading market share. Nonetheless, his company has not surpassed gold’s performance in 27 years.
After experiencing significant outperformance in previous years and decades, Warren Buffett’s Berkshire Hathaway is now roughly equivalent to merely holding gold since 1998, or about 27 years ago. pic.twitter.com/1N8k3niPR1
— Lyn Alden (@LynAldenContact) April 10, 2025
Bitcoin boasts various advantages over traditional precious metals:
- It bears no weight. Transporting and using gold as currency incurs significant costs
- Storing it is completely free
- It can be transferred anywhere in the world to any recipient
- It is divisible to an extensive number of decimal points
- It cannot be manipulated. The quantity of gold in Ft. Knox is not even fully known.
Concluding Thoughts
Bitcoin represents a departure from corrupt financial practices. While it may not directly purchase groceries at your local store, it can protect your savings.
Though Buffett will never endorse Bitcoin, he possesses invaluable insights and teachings on investing. Don’t disregard all his wisdom.
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Key Takeaways
- With the well-known trader and Berkshire Hathaway CEO Warren Buffett set to retire at year’s end, let’s take another look at his decision to never invest in BTC.
- Bitcoin signifies an escape from dishonest monetary practices. Even if it can’t buy you groceries, it can help secure your savings.
The post Warren Buffett: Why You Still Should Never Invest In Bitcoin appeared first on 99Bitcoins.
