Cryptocurrency

Crypto Leaders React as Warren Buffett Calls Crypto Worthless

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Financial tycoon and Chairman of Berkshire Hathaway, Warren Buffett, stated that cryptocurrencies have zero value in an interview with CNBC.

In response to an audience question asking whether Justin Sun (Founder of TRON) changed his mind on cryptocurrencies, Buffett said:

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“Cryptocurrencies basically have no value and they don’t produce anything… In terms of value: zero.”

“So, you can look at your little ledger item for the next 20 years and it says you have got x of this cryptocurrency or that – it doesn’t reproduce, it doesn’t deliver, it can’t mail you a check, it can’t do anything. And what you hope is that somebody else comes along and pays you more money for it later on, but then that person has got the problem,” he added.

Buffett further elaborated that even a decade after its introduction, and much speculation over the immense potential of digital currencies in various kinds of exchanges, the only real way Bitcoin was used was to “move around a fair bit of money illegally.”

He added that Bitcoin had essentially replaced suitcases used for money laundering traditionally. “The logical move from the introduction of Bitcoin is to short suitcases… You can look at that as the economic contribution of Bitcoin.”

Buffett: Dinner with Sun Did Not Change His Position

In response to the interview question, Buffett added that while his dinner with Justin Sun was a pleasant experience and resulted in a friendly exchange of ideas, it had not succeeded in changing his (or Sun’s) position on the value of cryptocurrencies.

Last year, Justin Sun, Founder of cryptocurrency TRON and CEO of file-sharing platform BitTorrent, bid almost $4.6 million for a charity lunch with Warren Buffett. Many speculated that the aim of the meeting was to convince the business magnate of the potential of cryptocurrency.

After the 3.5-hour long charity dinner, Sun indicated that Buffett now owned Bitcoin – a claim Buffett categorically denied in his recent interview. “I don’t own any cryptocurrency, I never will,” he stated.

After the interview, Sun took to Twitter to clarify that the BTC and TRX he had gifted Buffett remained intact in his blockchain-based Samsung Galaxy Fold wallet. He added that the crypto had earned 20 percent interest so far.

It should be noted that both Buffett and Sun talked about the charity dinner in glowing terms. In his interview, Buffett thanked Sun for donating such a significant amount that would undoubtedly benefit innumerable people in need. Likewise, Sun said that he learned a lot from Buffett’s wisdom, his life experiences, and his incredible vision for the future.

In fact, reacting to Buffett’s comment regarding how even he could create a cryptocurrency, Justin Sun tweeted:

Warren Buffett: Long-Time Crypto Critic

Buffett’s views on cryptocurrency remain consistent with his earlier statements on the topic. He has previously called Bitcoin – the first and biggest digital currency – a “delusion,” “probably rat poison squared,” “a mirage,” “tulips,” and “not a currency.”

The long-time crypto critic has also predicted that cryptocurrencies will no longer be around in another 10 or 20 years.

Buffett’s right-hand man, Vice Chairman of Berkshire Hathaway, Charlie Munger, has previously expressed similar sentiments. At an annual meeting of the multinational conglomerate, he called cryptocurrency “a turd” and said that crypto trading was “just dementia.”

Additionally, in a 2018 CNBC interview, Munger remarked, “Bitcoin is worthless, artificial gold… [it] is not something I think the world needs.”

“The fact that it’s clever computer science doesn’t mean it should be widely used, and that respectable people should encourage other people to speculate on it. Bitcoin reminds me of Oscar Wilde’s definition of fox hunting: ‘The pursuit of the uneatable by the unspeakable,’” he elaborated.

Crypto Leaders React

A number of leaders in the cryptocurrency field took to Twitter to express their outrage regarding the Buffett’s comments. Here is look at reactions of some notable figures in the field:

CEO of Binance, Chagpeng Zhao:

Co-founder of Morgan Creek, Anthony Pompliano:

 

Bitcoin engineer and Co-founder, CTO of Casa, Jameson Lopp:

 

CEO of Pixelmatic and CSO of Blockstream, Samson Mow:

On the other hand, economist and financial broker, Peter Schiff, tweeted in support of Buffett’s comments. He criticized CNBC for promoting Bitcoin rather than gold in their Warren Buffett interview, despite the fact that the price of gold is rising and that of Bitcoin is declining.

Earlier this year, Schiff expressed his frustration as he lost access to his Bitcoin wallet when he mixed up his wallet pin and password. The event led him to questioning Bitcoin security, which in turn drew much criticism from the crypto community.

Mahima Duggal

Mahima Duggal has completed her MA in International Security from the University of Warwick (UK) with distinction. She also holds a BSc (2:1 Honours) in International Relations from the London School of Economics and Political Science (LSE). She is a trained journalist who has completed an undergraduate degree in journalism and public relations from the University of Newcastle in Australia. Mahima's research interests involve technology, cyber security, human rights and international development. She follows all things crypto and strongly promotes the use of blockchain technology for social change.

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