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.”

Coinbase CEO Brian Armstrong: Crypto Will Create Economic Freedom

Michael LaVere
  • Brian Armstrong outlined Coinbase's road map for the next five to ten years. 
  • Goal is to get 100 million people to use cryptocurrency.

Brian Armstrong has outlined the ambitious roadmap for Coinbase, which includes promoting cryptocurrency beyond its use for trading. 

Economic Freedom

In a video published on July 31, Coinbase CEO Brian Armstrong gave users an open house view of the exchange’s strategy and roadmap for the coming years. Besides continuing its role as a platform for cryptoasset trading, Armstrong sees Coinbase evolving into a portal for information and accessibility. 

In particular, he wants the exchange to take a leading role in the dissemination of cryptocurrency and blockchain technology, with the ultimate goal of getting “100 million or more people to start [using] cryptocurrency.” He also views Coinbase as a catalyst for political change, claiming that the platform could play a role in impacting law creation and crypto regulation, in addition to its financial impact. 

Armstrong told his audience, 

“The vision for Coinbase is creating more economic freedom for every person and business in the world over the next ten years.”

Coinbase has taken a proactive approach to cryptocurrency education through its Coinbase Earn program, which rewards users with coins for taking the time to learn about the technology and different assets. The exchange also operates Coinbase Ventures, an incubator program that invests in projects and startups that can provide value to the industry of crypto. 

Crypto Education 

Despite operating one of the world’s leading crypto exchanges, Armstrong conceded that his team would not be able to generate his desired impact alone. 

He told viewers, 

“Coinbase can’t do it alone, there needs to be thousands of companies out there.”

However, he highlighted the work Coinbase has done in becoming the world's largest cryptocurrency custodian as a possible model to be emulated. He said the key was focusing on compliance with regulators and creating relationships with existing financial institutions as opposed to subverting the system--an idea the Winklevoss Twins’ similarly pitched to Mark Zuckerberg in response to Facebook developing libra.

The CEO also set a lofty goal for his team, saying he wanted Coinbase to “have a billion people in say five to ten years accessing an open financial system through our products every day.”

Armstrong has previously expressed a desire to build beyond crypto trading. In an AMA hosted in July, the CEO predicted an abundance of crypto exchanges emerging over the next five years and that Coinbase would need to differentiate itself. He imagined the platform becoming a place where people “develop their crypto education,” before launching their own projects or contributing to the industry.