Warren Buffett & Bitcoin: Get ready for Rumble

Warren Buffett is not a big fan of cryptocurrencies like Bitcoin.

“Cryptocurrencies are basically worthless,” he once said CNBC. “You can’t do anything with it except sell it to someone else. But then that person has the problem. ”

Buffett capped the interview with dramatic flair.

“I don’t own any cryptocurrency,” he concluded. “I never will.”

There is only one problem: Buffett has reversed course before, and will again with Bitcoin.

Sometimes people are wrong

For decades, Buffett promised he would never invest in airlines.

“The airline business has been remarkable. It has consumed capital over the last century like almost no other business because it seems that people are still coming back to it and putting in fresh money, ”he explained. “You have huge fixed costs, you have strong trade unions and you have commodity prices. That’s not a great recipe for success. ”

Yet in 2014, he became a major shareholder in four different airlines.

This is not the only time he has reversed a course. After avoiding technology stocks for decades, Buffett is now a huge investor in space. He owns behemoths worth millions of dollars like Amazon a Apple. In fact, Apple now accounts for nearly 50% of its entire public equity portfolio!

“Yeah, I’ve been a fan, and I’ve been an idiot for not buying,” he told reporters after picking up Amazon shares for the first time.

Buffett will get around to Bitcoin

Countless experts have reversed course when it comes to cryptocurrencies like Bitcoin.

Financial historian Niall Ferguson says it is “wrong to think that there was no use for a type of currency based on blockchain technology.” Before Business Insider editor Joe Weisenthal thought Bitcoin was a currency for clowns. “Now, I don’t think so anymore,” he said.

Buffett’s close friend, JP Morgan Chase CEO Jamie Dimon, has also turned opinion on Bitcoin. He once said he would fire up any traders who were “dumb enough to buy it.” Today, his company thinks Bitcoin prices could rise all the way to US $ 146,000!

Buffett is a great investor – perhaps the best in modern history. And yet no one would argue that he was an early adopter. Most notably, it has struggled to find investments that do not generate direct cash flow profits, such as gold.

He summed up his thoughts once, saying that gold is “dug out of the earth in Africa… Then we melt it down, dig another hole, bury it again and pay people to stand around protected. It has no usefulness. Anyone watching from Mars could scratch their head. “

And yet last year, Buffett poured $ 500 million into one of the largest gold miners on the planet. It has come out strong against some asset classes in the past, only to invest serious money years or even decades later.

Bottom line

There is no doubt that Bitcoin is one of the most volatile investments you can buy today. It’s not for everyone.

But should you be afraid that Buffett doesn’t approve? The answer is no. Don’t be surprised if he jumps in down the line.

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John Mackey, CEO of Whole Foods Market, a subsidiary of Amazon, is a member of The Motley Fool’s board of directors. David Gardner holds shares of Amazon and Apple. The Motley Fool owns and recommends shares of Amazon and Apple and recommends the following options: January 2022 $ 1920 long calls on Amazon and January 2022 $ 1940 short calls on Amazon. The foolish contributor Ryan Vanzo has no position in any of the stocks mentioned.