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Warren Buffett didn't get to be a billionaire by being wrong, but it's clear from what he's been saying about investing in Bitcoin that he just doesn't get the digital currency.
Last Friday on CNBC, Buffett, the chairman of Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B), unleashed his second dismissal of Bitcoin this month.
"Stay away from it," Buffett said during a panel discussion. "It's a mirage, basically."
While Buffett did concede that Bitcoin is "a very effective way of transmitting money," he said it differed little from older ways of transmitting money, such as checks or money orders.
"Are checks worth a whole lot of money just because they can transmit money? Are money orders?" Buffett scoffed. "The idea that [Bitcoin] has some huge intrinsic value is just a joke in my view."
And two weeks ago, also on CNBC, Buffett had this to say about Bitcoin: "It's not a currency. I wouldn't be surprised if it wasn't around in the next 10 to 20 years."
While investors usually do well following the advice of Warren Buffett, there's more to Bitcoin than the Oracle of Omaha may recognize.
There has been a lot of negative Bitcoin news lately – most notably the bankruptcy of the Mt. Gox Bitcoin exchange – and it is without a doubt going through some growing pains. But the digital currency is still very young, and most of its potential is as yet unrealized.
If Warren Buffett – not to mention all those stories in the mainstream media – were correct, investing in Bitcoin should be waning as people scramble for the exits.
Instead, the statistics tell the opposite story…
Why People Are Still Investing in Bitcoin
The most obvious evidence that Bitcoin is far from dead is the resilience of Bitcoin prices over the past month.
Two weeks ago, we pointed out that Bitcoin prices had rebounded and then stabilized after Mt. Gox went dark on Feb. 25. Since then, Bitcoin prices on the CoinDesk index have settled into the $620 to $630 range. Not only have Bitcoin prices not collapsed, they've shed much of their volatility.
But what's more telling are the numbers that show interest in Bitcoin has actually continued to rise over the past couple of months, regardless of bad news or attacks from critics…
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.