Buying Bitcoin “Is Not Investing” Says Billionaire Investor Warren Buffett

Francisco Memoria
  • Billionaire investor Warren Buffett claims buying bitcoin isn't investing.
  • According to him, buying cryptocurrencies is speculating, as people just want others to buy at a higher price later on.

Berkshire Hathaway CEO and billionaire investor Warren Buffet has recently stated he believes buying cryptocurrencies like bitcoin “is not investing,” and laid out his thoughts on the crypto market during an interview with Yahoo Finance in Omaha.

According to the investor, there are two kinds of items people buy when they think they’re investing. He explained that “one really is investing, and the other isn’t.” Bitcoin, per Buffett, isn’t.

The CEO then compared investing in cryptocurrencies to other investments. 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.”

Warren Buffett

Buffet continued, adding that buying bitcoin and other cryptocurrencies isn’t investing, but speculating. Although he claimed there’s nothing wrong with speculating, he implied cryptocurrency users just buy so someone else buys at a higher price later on, which to him is a “kind of game.”

Per his words, if regulators stopped people from trading farms, apartments, or even equities, investors would still do fine. If the same happened to “some bitcoin which nobody knows exactly what it is,” people wouldn’t want to buy.

Notably, the billionaire has earlier this year poured contempt on the cryptocurrency industry, stating that he can say “almost with certainty” that cryptocurrencies would come to a bad ending.

During an interview on CNBC’s “Squawk Box,” Buffett was asked if he had considered opening a futures position to short the market. He revealed he wouldn’t do it, as he gets into enough trouble with things he knows something about, so asked “why in the world” should he take a short position in something he “knows nothing about.”

Nevertheless, he maintained cryptocurrencies would come to a bad ending, and added Berkshire Hathaway doesn’t own or short any cryptocurrencies, and “will never have a position in them.”

Binance Preparing to Finally Offer BitMEX Some Real Competition in Crypto Futures Trading

Earlier today (July 2), at the second annual Asia Blockchain Summit (in Taipei, Taiwan), Binance CEO Changpeng Zhao (aka "CZ") announced that his firm "will be launching a futures platform very soon."

During his keynote speech, CZ talked about Binance's journey from the launch of its centralized spot exchange on 14 July 2017 to the launch of a Bitcoin-backed BEP32 token (called BTCB) on its native blockchain (Binance Chain):

CZ's Talk in Taipei - July 2019 - Slide 1.jpg

More importantly, toward the end of his talk, CZ presented a screenshot showing the trading interface for Binance's upcoming futures trading platform:

Binance Futures Screenshot - July 2019.jpeg

As for when this platform will be launched, CZ said:

Binance will be launching a futures platform very soon. I don’t have the exact date yet. The simulation test version will be live in a few weeks.

Based on what we can see in this slide, what CZ said, and what a Binance spokesperson told Coindesk, here is what we know so far:

  • Initially, there will be support for only Bitcoin (BTC-USDT).
  • Leverage will initially be up to 20X.
  • Eventually, support will be offered for higher leverage as well as more pairs. 
  • The test version of "Binance Futures" will be launched "about a week" after margin trading has been rolled out to all Binance users (this rollout is expected to be complete by around July 11).

Over on Crypto Twitter, this is what Anthony Pompliano (aka "Pomp"), Co-foun,er & Partner at Morgan Creek Digital Assets, had to say:

Also, crypto analyst/trader Luke Martin, made the following interesting observation: