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.”

Blockstream Unveils Bitcoin Mining Facilities, With Fidelity as Early Customer

Bitcoin and blockchain technology company Blockstream has recently launched a colocation mining service that already has the Fidelity Center for Applied Technology on board as a customer.

Other notable customers include LinkedIn founder Reid Hoffman. According to Forbes, Blockstream released details regarding Bitcoin mining data centers in Quebec, Canada, and in Adel, Georgia. These, combined, have 300 megawatts worth of energy capacity that’s available to host enterprise-level mining operations.

The facilities reportedly accommodate Blockstream’s own mining operation, and are set to be open for smaller miners in the future. The company’s CSO Samson Mow reportedly noted that the facilities could add about 6 exahashes of computing power to the Bitcoin network, if used with the latest ASIC mining machines.

The company is also set to launch a new BetterHash-based mining pool, Blockstream Pool, that’s reportedly going to put the power back in the hands of individual miners. The firm is, according to a blog post, concerned about the potential centralization of Bitcoin and the network’s future. It wrote:

We began self-mining back in 2017 after being motivated by widespread concern that mining decentralization was declining. (…) We figured we could use our Bitcoin expertise to improve the situation.

The BetterHash project is designed to help decentralized mining pool decisions, by putting them in the hands of individual miners. Decisions such as which block to mine, for example, aren’t taken by the pool itself.

Blockstream’s blog post notes it first got into Bitcoin in 2017 over concerns surrounding its centralization. Some – mostly Bitcoin Cash proponents – argue the company helped push a “small block narrative” onto Bitcoin to then make money through the use of sidechains.