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:
“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.
The cryptos $BTC/ $TRX Mr. Buffett owns remain intact w/ #blockchain proof which is the beauty of blockchain. I won’t interpret Mr. Buffett as a crypto investor, which he’s not. He only has the $BTC/ $TRX I gifted him, in his Samsung Galaxy Fold, which is a 20% return thus far!
— Justin Sun (@justinsuntron) February 25, 2020
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:
I will support WARRENCOIN on #TRON! WARRENCOIN would be a great crypto & I would support it wholeheartedly! 7 billion WARRENCOIN will be issued without monetary value, which means everyone should have one and be Mr. Buffett's fan. WARRENCOIN to the moon! 🚀😆
— Justin Sun (@justinsuntron) February 25, 2020
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:
😂 @justinsuntron? he knows how to sell that bitcoin? Or we can consider that’s “burned”?
Nice effort, but you can only take a horse to water…
This is why I rarely try to convince anyone. Their choice.
Crypto doesn’t have to be used by everyone. My grandma never used USD. https://t.co/3iHeAp16H7
— CZ Binance 🔶🔶🔶 (@cz_binance) February 24, 2020
— CZ Binance 🔶🔶🔶 (@cz_binance) February 25, 2020
Co-founder of Morgan Creek, Anthony Pompliano:
Long Bitcoin, Short Suitcases!
Wait till Buffett hears that Wells Fargo, one of the companies he has a minority stake in, knowingly helped the Sinaloa drug cartel launder millions of dollars… pic.twitter.com/Z7DGHlh9AU
— Pomp 🌪 (@APompliano) February 24, 2020
Bitcoin engineer and Co-founder, CTO of Casa, Jameson Lopp:
Monday morning laughs:
"Justin Sun is actively involved in Bitcoin"
"Cryptocurrency has no value"
"Justin gave you some bitcoin…" – "HA I don't own any cryptocurrency and I never will"
"Bitcoin has been used to move money illegally"https://t.co/heC7MvuwT1
— Jameson Lopp (@lopp) February 24, 2020
CEO of Pixelmatic and CSO of Blockstream, Samson Mow:
Buffett misses the mark with #cryptocurrencies because his mental model compares them to stocks. #Bitcoin is the new monetary base; it doesn't generate yield. When yield generating businesses pay dividends in $BTC, then yes, you'll get a "cheque in the mail" with some. https://t.co/pS6rX64Drx
— Samson Mow (@Excellion) February 24, 2020
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.
One thing that @WarrenBuffett and I have in common is that neither one of us owns any Bitcoin. It's also interesting that during a lengthy interview on @CNBC, with #gold rising $40 to a 7-year high and #Bitcoin trading lower, Buffett was asked to comment on Bitcoin but not gold!
— Peter Schiff (@PeterSchiff) February 24, 2020
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.