Warren Buffet Criticizes Bitcoin at Berkshire Hathaway Annual Meeting (Here’s Why He’s Wrong)
This week, Warren Buffet, American business magnate, investor, and current CEO of Berkshire Hathaway, attended the Berkshire Hathaway annual meeting, nicknamed the Woodstock for Capitalists, in Omaha Nebraska.
Due to COVID, this was Berkshire Hathaway’s (America’s largest corporate gathering), first in-person annual meeting since 2019.
Around 40,000 shareholders attended the annual meeting to hear from prolific investors and celebrate the wealth they’ve generated by investing in the conglomerate.
Buffett used the annual meeting to reveal significant new investments, including a bigger stake in video game giant Activision Blizzard Inc. and oil company Chevron Corp, increasing his stake nearly six-fold to more than $31 billion.
Following Berkshire’s formal business meeting was nearly five hours of Q&A with Buffett and longtime partner, Vice Chairman Charlie Munger. In this Q&A, the two legendary investors took numerous shareholder questions on a broad range of issues, commenting on inflation, Bitcoin, and much more.
Speaking on inflation, Buffet said that inflation “swindles equity,” adding “(inflation) swindles the bond investor, too. It swindles the person who keeps their cash under their mattress. It swindles almost everybody.”
Buffet’s Comments on Bitcoin
During the Q&A, Buffett commented on the current state of the market, calling it a “gambling parlour,” while also stressing “new forms of money,” which is when Bitcoin came up.
Buffett is known for his antagonistic stance against Bitcoin, speaking on it numerous times and professing his lack of confidence in the digital asset.
He took the time at the Q&A to speak even further on his views on Bitcoin. Buffett stated that he wouldn’t buy bitcoin because “it doesn’t produce anything,” going so far as to say, “If you told me you own all of the bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it? I’d have to sell it back to you one way or another.”
“Whether it goes up or down in the next year, or five or ten years, I don’t know. But the one thing I’m pretty sure of is that it doesn’t produce anything,” Buffett said. “It’s got a magic to it, and people have attached magic to lots of things.”
He then went on to list numerous other assets that are more tangible than Bitcoin, listing farmland, apartment buildings and even art.
“Assets, to have value, have to deliver something to somebody. And there’s only one currency that’s accepted. You can come up with all kinds of things. We can put up Berkshire coins, put up Berkshire money but in the end, this is money,” he said, while displaying a $20 bill. “And there’s no reason in the world why the United States government … is going to let Berkshire money replace theirs.”
The Aftermath of Buffet’s Comments
Due to his stance on Bitcoin, Peter Thiel, co-founder of PayPal and an advocator for Bitcoin, called Buffet “the sociopathic Grandpa from Omaha” at the BTC Miami 2022 conference. Thiel also accused Buffet of institutional bias and said Bitcoin could undermine traditional investment firms, predicting that as the reason why Berkshire Hathaway’s CEO is so opposed to the digital asset.
It’s not surprising Buffet would stand firmly against Bitcoin. He has after all built his wealth on the existing financial system. It has served him well throughout the decades so why should he lean on bitcoin?
Bitcoin is coming to disrupt and democratize the financial industry so that everyone – including the middle and low-classes – can benefit too. That’s why when Bitcoin critics speak up, it’s important to question who they are and how they might’ve benefited from the existing system. Most people unfortunately forget to question and to do their own research.
Following the meeting and the criticisms made by Buffet, Bitcoin slipped 1.4%, bringing its weekly slump to over 5%, while Ethereum lost 1%, also totalling 5% losses in the last week.
Though these drops could be due to the meeting, the digital asset space, in general, has been on a decline for numerous reasons. The current conflict in Ukraine, rising inflation, and the Federal Reserve’s plans to raise interest rates this month are all attributed to the diminishing price and interest in Bitcoin and digital assets.
Remember, Bitcoin’s fundamentals have not changed.
Writer, content marketing at Netcoins.