The billionaire investor and business mogul Warren Buffett is no stranger to cryptocurrency and blockchain technology. However, his opinion is not exactly positive. As a matter of fact, he does not seem to hold cryptocurrencies in very high regard at all.
Some months ago, coinciding with the terrible start to the year cryptocurrencies had, Buffett warned that the whole project was doomed to failure. Now, he has changed his tune slightly. He no longer condemns the whole cryptocurrency scene but has focused his criticism on the most famous coin of all: Bitcoin.
What does Warren Buffett think of Bitcoin?
In an interview with Yahoo Finance, Buffett explained why he does not consider cryptocurrency to be an actual investment. Given that cryptocurrencies do not have any intrinsic value, but rather is just a symbol, Buffett considers it to be speculation. In the interview, he said:
“If you buy something like a farm, an apartment house, or an interest in a business… You can do that on a private basis… And it’s a perfectly satisfactory investment. You look at the investment itself to deliver the return to you. Now, if you buy something like bitcoin or some cryptocurrency, you don’t really have anything that has produced anything. You’re just hoping the next guy pays more.”
There may be more to the story
Why focus on Bitcoin, when it is perhaps the most legitimate cryptocurrency in circulation right now? The answer, as always, is found at the end of the paper trail. Buffett is indirectly investing in one of the most famous alt coins: Ripple (also known as XPR).
Whilst not directly trading in cryptocurrencies himself, Buffett is investing in financial institutions that are working on using cryptocurrencies for payments. Ripple is a particular favorite of these financial institutions, who use it for international transactions.
A specific example of one such institution is Bank of New York Mellon, which Buffett invests in heavily. BNY Mellon aims to incorporate blockchain technology within the next ten years. Specifically, the bank mentions Ripple’s inter-ledger protocol as something that could become industry standard later down the line.
Get on board or get left behind
It would seem, then, that Buffett has perhaps been a little too hasty in his judgment about blockchain and cryptocurrency. Perhaps he has even been wrong about cryptocurrencies not having any intrinsic value as well. The value of cryptocurrency could very well be found in the underlying technology and its utility.
As more and more companies begin to embrace blockchain and cryptocurrency, it will eventually be a question of either getting on board the cryptocurrency train or getting left behind. And moguls like Warren Buffett did not get to where they are by letting themselves get left behind by their competition.
What do you think the future holds for cryptocurrencies like Ripple in the market of financial institutions? Do you think their technology will become an industry standard and a household name?
Leave your opinions in the comment section below!