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The billionaire investor icon Warren Buffett is bearish on cryptocurrency in all its forms. He argues that the price of bitcoin is a "real bubble", and he is also not optimistic about the potential of initial coin offerings.
Warren Buffett: Bitcoin Awards a "Real Bubble"
As reported in MarketWatch the CEO of Berkshire Hathaway – known as the "Oracle of Omaha" – did these comments earlier this month at an "Ask Me Anything". Q & A session with business students. At least one student asked Buffett about cryptocurrency, and – unsurprisingly – he replied that he was not excited about bitcoin or other digital currencies.
"You can not value bitcoin because it's not a value-added asset," he warns, undermining strategists and hedge fund managers who believe in Metcalfe's law . squared the number of its user base – provides an effective measure to decipher the value of bitcoin.
There is a "real bubble in this kind of thing", he added, echoing comments made by UBS earlier this month.
Not impressed by Hype Hype
Buffett reportedly also tackled the growing hype around initial coin offerings (ICOs), fundraising events by which blockchain startups can finance crowdfund projects by selling their crypto tokens that could represent a number of things, ranging from access to a product or service to a right to a percentage of the profits of a platform.
He expressed concern that ICOs – which raised more than $ 3.2 billion in 2017 alone according to the ICO CoinSchedule tracking tool – will not be beneficial for the investment sector. "People are excited by the big price movements, and Wall Street is adapting," he said.
This skeptical view of cryptocurrency is consistent with Buffett's past statements about bitcoin. A few years ago, he called it a "mirage" arguing that it was a "joke" to attribute a value to something just because it can be used to transmit money. "Are checks worth a lot of money just because they can pass on money?" He asked at the time.
Clearly, Buffett does not know how bitcoin works – let alone the concept of [“1945b008] "fat protocols" – but again, he did not not used Berkshire Hathaway in a $ 465 billion empire by positioning itself at the forefront of technological innovation. Indeed, the Berkshire Hathaway Web site underwent virtually no change since the year 2000 .
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