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Warren Buffett and Bill Gates have been friends a long time. They have vacationed together, given to philanthropic causes together, and have publicly bashed Bitcoin together.
Shortly after describing Bitcoin as ârat poisonâ and âcreating nothing,â Buffett was quickly joined in his criticism of the prominent cryptocurrency by Gates, who added itâs a âkind of a pure âgreater fool theoryâ type of investment.â
(Side note: Bill received some Bitcoin for his birthday and âsold it a few years later?â Ok BillâŠhow much money has Bitcoin actually made you?)
Now although you may expect me to counter these statements with facts and statistics on why Bitcoin is one of the most incredible economic advancements since the advent of the computer, Iâd instead like to point you to Buffettâs own words he penned to his investment partners circa 1967:
We will not go into businesses where technology which is way over my head is crucial to the investment decision. I know about as much about semi-conductors or integrated circuits as I do of the mating habits of the chrzaszcz.
(Apparently chrzaszcz is the Polish term for âbeetle.â)
This was Buffettâs reasoning behind avoiding most investments in technology throughout the years, and to me, it stacks up with his investment strategy. For those of you who arenât familiar, Iâve written several articles on his value investing methods. You can find the first of those here. Essentially, Buffettâs financial plan boils down to one simple point:
Invest in things you know and believe in, and hold long term.
Or, translated into crypto-ese:
Do your own research, invest only what you can afford to lose, and HODL.
Traditionally, Buffett has been a fan of maintaining a strict sense of integrity with his investments. Consider, for instance, his full cooperation with the SEC in 1991 over the Salomon debacle. Or his early push against American Express Executives to ensure shareholders were properly compensated after the famous seawater scandal.
Throughout his life, Buffett has seen his fair share of trial through which his integrity has proceeded unscathed. But take just a moment to peruse this list of Berkshire Hathaway assets. Do a quick control-F search for the word âbank.â Or even âfinance.â
Bitcoin and decentralized cryptocurrency by definition will change the way banking is done forever, and it stands to reason that, should Bitcoin succeed, Buffett, Gates, and Berkshire Hathaway stand to lose quite a bit of money. Potential losses though, have never incited Buffett to belittle competition through name-calling. Bitcoin and cryptocurrency should be no different.
I owe much of my personal success in the cryptocurrency space to my study of Warren Buffett, and I am disappointed that he has reverted to trash talking competition instead of pointing people back to the personal mantras that have enriched him and the people who have followed his example thus far.
Perhaps, instead of calling Bitcoin ârat poison,â the Oracle of Omaha could have quoted himself from 1967. Perhaps, instead of discouraging people away from innovative and financially empowering technology, Buffett could have pointed eager young investors towards value investing principals. Because at the end of the day, weâre all better off when weâre all financially liberated. And Bitcoin may provide just that.
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Why Buffett and Bill are Wrong About Bitcoin was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.
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The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.