Bitcoin Forum

This latest comment on bitcoin and what we should be thinking of it when we buy is fair I reckon. He comes from the old world of investing, and it is very understandable that when he sees bitcoin as an investment, he says what?

Also, he is telling us what we are really doing. We are not investing, we are speculating. But I like to view it as a store of value. In short, saving.

https://typeboard.com/wp-content/uploads/2017/11/bitcoin-warren-buffett-696x452.jpg

Buffett laid out his latest thinking on cryptocurrency investing.

“There’s two kinds of items that people buy and think they’re investing,” he says. “One really is investing and the other isn’t.” Bitcoin, he says, isn’t.

“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.”

When you buy cryptocurrency, Buffett continues, “You aren’t investing when you do that. You’re speculating. There’s nothing wrong with it. If you wanna gamble somebody else will come along and pay more money tomorrow, that’s one kind of game. That is not investing.”

Read in full https://finance.yahoo.com/news/warren-buffett-buying-bitcoin-not-investing-110702015.html?guccounter=1

Technically, bitcoin is considered as an asset wherein people would acquire it hoping that its price would skyrocket in a given amount of time. Some countries (like the Philippines) even considered it as a property and not legal tender!
Compared to other investment mechanisms, acquiring bitcoin has the highest total yield of interest in a short amount of time. But what makes bitcoin different is its nature and regulation. It is intangible, volatile (which is subject to country prohibitions, etc.), unpredictable and decentralized.

I do understand where he is coming from as most famous investors are inclined into the traditional way of investing but everything has to start from somewhere. Bitcoin can be regarded as the next type of investment in the digital age where it has the potential of becoming a standard currency in the future.

I consider an investment something that i purchase and I hope when I sell it I make a profit. Could be stocks, could be p2p loans, could be gold, could be real estate, could be cryptos, could be some other sort of thing.

Buffett is is saying he doesn't consider buying something to sell it later as an investment, thats speculating. Which okay I guess that is technically correct, though to me using the word speculating or investing doesn't matter to me, the point is to make money by buying something that has value and getting more out of it than what you paid. And he only believes in investing in things, which is where the actual thing you bought makes you money while you own it, and not just when you sell it - like dividends or renting out some real estate you bought or I guess buying a house to live in would work to since that purchase is basically paying your rent each month.

So that would mean not all stocks are investments, only the ones that pay dividends. Real estate is only an investment if you are actively renting it out or actively living in it. And I guess perhaps p2p loans would be an investment since you get the interest every period. But doing futures and whatever other crazy stuff is done on Wall St are not investments, buying stuff like gold and silver is not, cryptos are not, stocks that don't offer dividends are not.

He is not completely wrong, but we could say the same about gold for example.

His vision about investment is like "whatever generate cash flows", and bitcoin obviously does not have any cash flow, but it do have a worth based on asks and bids. So it is gold and silver.

yeah exactly that is a succinct way to put it. Investments according to him generate a cash flow for the owner. Which is why he only believes in buying something to hold for a very long term, because he doesn't believe in speculating. So he cares about dividends and not about the future price of thing, which means he doesn't care how many billions of dollars he is worth, he cares about how much cash it generates in regular dividends to him.

Though this means that proof of stake coins are investments. Because if you stake all your coins it generates income for you.

this is mostly playing with words!
if you start thinking like that then when you buy a farm, house, business,... you are also speculating. that is not a satisfactory investment either because you are wishing that the next guy pays more for your house, farm, business if you wanted to sell and also wish that your farm, business,... don't go under and stay productive.

and when you buy Berkshire-Hathaway stocks which belongs to Warren himself you are wishing that Warren pumps it more so you are not investing there either.

it has been some time that I have been waiting for this news to come out and we finally see the wallet addresses that belong to Warren Buffet which hold at least 1000 bitcoin and  counting. and we will finally see that he has been investing in bitcoin silently while telling everyone else not to do it because he wanted a lower price for his purchases throughout the years as he slowly parks a large amount of money in bitcoin.

He doesn't understand technologies. He did not get the internet. Nor has he invested in any tech companies for a very long time. Apple is the first one he invested in now.
He is a dinosaur in a pretty fast changing world and society. The shift from the industrial age into post industrial and the digitized age is happening faster and faster with every day passing by.
I don't get it why people are still listening to what he has to say. I don't care what his definition of investing is.
That will not change my opinion that Bitcoin is a once in a lifetime opportunity. And now is the time where you can still afford it to buy for a cheap price.

You're talking about flipping assets. That's just speculation. He's talking about buying assets that generate a return.


Any asset can be speculated on, BTC or stocks or anything else. But the value of Berkshire Hathaway is definitely directly tied to its lucrative insurance businesses/balance sheet and the companies it holds. It's not valued purely on faith or anything.

This is all about definitions. Doesn't prove anything. If he says that investing is only when the asset you acquire produces returns on top of capital gains, then yeah. Bitcoin doesn't produce any sort of dividends. But is it really fair to classify "investments" as only things that produce you dividends? I don't think it is.

By his standards, gold isn't an investment, even though it's a long term proven store of value, much like bitcoin will become. Yet, something as illogical as putting your money into the bank for the long run, is.

Honestly, who cares what the definitions are. We know what bitcoin is, what bitcoin is useful for. And that's honestly enough.

I definitely feel like it's a bit of a stretch to say that bitcoin isn't an investment, when a ton of people are using it as a store of value and hedge against the fiat currencies.

I completely respect the opinion of Warren Buffet, he is basically the man who became a billionaire just by investing in assets such as stocks and real estate. One thing is for sure is that he knows more about investing compared to what we all know. All through out the existence of Bitcoin he kept his opinion at neutral siding with know one but his beliefs on what investments are. His statements always revolves around Bitcoin having no fair market value or it simply hard to put a price on it. Warren Buffet as an investor simply uses fundamental analysis on his buy and sell decisions which he can barely do on whether Bitcoin is a good buy or not because all we have are just news and its historical price charts in order to make a buy and sell decision to Bitcoin which is really in a semi-speculative manner as technical analysis is also involve.

well it is hard to take the words of this guy seriously when all he has been saying so far about bitcoin was that it is going to "end badly"; but so far bitcoin only got stronger and stronger. in fact it was even adopted by multiple countries as a real currency and now millions of merchants are accepting it.

the price is not rising based on faith or whatever else you want to call it. it is rising based on this usability of bitcoin as a currency and the demand for that.

Bitcoin's usability as currency is as low as it has always been. No matter how much I like Bitcoin, I am realistic about how things are, and the reality of the day is that Bitcoin and other cryptos are speculative assets.

Barely anyone is interested in using Bitcoin as currency, because that has been proven to be a guaranteed way to lose out in the long term. What you spent last month at $1000 for example, is likely worth $1500 next month.

That's exactly what holds people back from using Bitcoin as currency. That of course doesn't mean people aren't using it as such, but those who do are a very small minority. Bitcoin needs stability and off-chain layers.

But if that is true, if it continues to not be used as a currency precisely because the price keeps going up, then that doesn't matter because that means the price continues to rise even without it being used as a currency, so its usage as a currency doesn't matter you are saying as it's price will continue to go up and it will always be a good investment. Just showing how your logic doesn't make sense if you say a rising price means it won't be used as a currency, because that says if the price doesn't rise then people would be interested in using it as a currency, which would then also raise its price.

Ok to add a wrinkle to what Buffett says....his OWN company doesn't pay dividends!!!

So by his own definition buying stock of his own company is not an investment but rather pure speculation just like Bitcoin. So if everyone followed his own investment advice the stock of his company would go to zero.

I think this isn't completely true. Bitcoin basically has mechanism that proves its price called proof of work. Basically yeah we all are speculating above it but even at dip it doesn't worth "nothing". It worths more than electricity consumption and compare it with fixed supply.

He is right we are not investing we are speculating and making a profit when the price increases.

The real investment that you can invest and make a profit. Like buying a hardware for mining because the price of bitcoin is not stable because any time you can be lost in investing in bitcoin that you don't know if the price will inrease or not.

Bitcoin holders are treating bitcoin as an investment, but the fact as a trader they are speculating and making a profit when the price increased.

It doesn't matter whether Bitcoin will ever be used as currency or not, the whole point is that it will very likely end up being similar to what Gold is right now. Gold was and in some cases is still being seen as currency, but no one uses it as such. Did it affect its value? Nope. People tend to put the focus too much on the currency aspect, while there are much more ways of using Bitcoin than that.

I think you should learn to read and acknowledge what someone is saying. He's referring to the fact that Bitcoin is a speculative asset (ie, investment tool) and not a currency. In that regard, the price going up and down doesn't matter. Lower price means people enter the market, and a higher price means they exit the market, and this cycle will repeat itself endlessly. Only stability will make people use Bitcoin as currency.

It depends on how you intend to invest though. Most people /investors simply trade and still call it invest. And besides, there are only three ways to acquire bitcoin. The first is through faucet or sites which promise you free bitcoin but at the end its all full of shit and time waster. The second is to mine bitcoin which praticaly not everyone that owns the money to buy the mining machine. So people ends up buying bitcoin to invest.

I can understand where he comes from. He became insanely wealthy by doing what he considers to be the best possible way to generate steady returns, and it worked out more than well for him. We can't expect him (or basically any similar old school investor) to be in favor of something like Bitcoin. On top of that, being an individual with his status and wealth, he already has reached what we can only dream of. It's all about different perspectives on what life has to offer. It's the old elite versus now the potentially new crypto elite. I used to go hard against Warren Buffett and others, but it's pointless to do so if you think about how much of a different group we are. I respect him for being what he is and how consistent his wealth kept growing throughout the years.

The differences between investing and speculating aren't all that great. Buying a house you also factor in potential growth in the value and the fact that someone will buy it after you, so in that sense his example is pretty poor.

So literally he is telling that investing in property is not investment and it is just speculating and gamble, the funny thing is that we are hearing this from a real estate broker .  :D How does he describes property valuation, according to him with this comparison buying property is not investing as it is also a gamble that somebody else will come along and pay more money tomorrow. :P

No, investing for him means, putting money in a stock that is backed by a real growing company with real profits, with real employees and with real products and services. It does not matter if the stock pays or does not pay any dividends.

Also, I have no problem with his definition of investing and speculating as long as he stops saying that bitcoin is a bubble.

ok i accept the first part but not the last one.
bitcoin price is not based on "faith" or anything like that either. like anything else bitcoin is providing us with something useful and valuable (a payment system) and as we use this system and see its ability we buy more of it and use it more, a lot of businesses shape around it, a lot of merchants accept it and increase their revenue and because of that price goes up.

so when saying "...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..." makes bitcoin sound like a Ponzi scheme which i suspect was the main purpose of this article.

Bitcoin's price is not based on "faith", it is based on the laws of supply and demand, and Warren Buffet is partly correct in saying that it is more as a speculation than an investment. But what if I say holding is an investment on the Core developers' ability to deliver the best and most secure cryptocurrency, decentralized, censorship resistant payment system. Would that be wrong?

I was going to say this. I don’t agree with Buffet’s examples. Using fiat to buy bitcoin is for me similar to use Zimbabwe dollars to buy US dollars. If you buy US dollars is because you believe they will have a brighter future than the Zimbabwe ones: they will be accepted in more places, even outside the US, thus the price will go up.

Comparing buying bitcoin with buying a farm looks like comparing apples and oranges to me.

He said similar things regarding gold: https://www.youtube.com/watch?v=BtN17EGeVVA

Obviously bitcoin, nor gold, does not produce anything as a dividend or yield like a farm or a stock. However, they are still both very good investments, and in fact, they are most likely much better store of values than the fiat currencies.

Bitcoin is a decentralised currency. How can you have a currency that produces yield for you?

Yes, in a sense that you're expecting the next guy to pay more for your bitcoin in the future. But there is evidence for that. Unlike fiat, bitcoin is decentralised, and disinflationary. As fiat currencies depreciate, bitcoin prices will appreciate as a result. So really what bitcoin is doing is just holding its value in real terms, in the long run. Short term volatility is another thing, if you invest in BTC in the short term, I agree, it should be called speculation.

But I think the definition of investing is anything which you put in that you expect more monetary rewards back. And BTC investing, whether short or long term, both fit that general definition that is accepted by most people.

it is still based on faith . Why ?  Because if people do have a faith on it , they will porbably continue to hold it and the price will remain stable or maybe increasing but it is also based on the demand and supply.


Bitcoin isnt more of a speculation nor an investment because its main usage and purpose is still a currency that is used for buying. People often speculate because the value of it is too volatile and unpredictable. Also there are few people who use it as investment because bitcoin can also become an asset aside from a currency.


Yes holding can also be considered as investing because you manage to hold and wait for a better price in orderto sell and get a profit. That isnt also wrong.

I respect Buffett as an outstanding investor of all time.
As for Bitcoin, he is right. This is real speculation.
But there is an investment in a blockchain-company through ICO. This is quite another matter.

What he wanted to say is you don't have any tangible item/material/asset/contract when you buy bitcoin so you are not investing and that's why he ended up saying it doesn't produce anything. He still doesn't know things about bitcoin, he's old man and he can't understand what's the new trend in the world of investment. I know he's a genius but to tell that you are not investing when you buy bitcoin, he can be correct to others and he can't be to most that are bitcoin buyers/investors.
Summary: He still don't see bitcoin as an asset/investment. We do have our own definition of what investing is and he has it too.

Sure it is. Fundamentally, people use Bitcoin because other people use Bitcoin. If other people didn't use it, it would have no utility. Its utility can only exist in the context of the network effect. This is why it boils down to faith that other people will accept it, or speculative faith that the network will grow.


Probably. I think people tend to take Buffett out of context to fit narratives. On its face, what he's saying makes sense: you don't see him trading forex either. He's not a speculator. His approach to investment is generating cash flow. There's nothing wrong with that.

Are we in a religion? Hahaha.

Math, science, economics are what make Bitcoin rise and fall. You can have faith in a cryptocurrency but that does not assure you of anything.


No, Bitcoin is held by us more as an investment or as a "speculative asset" because spending them today would be a lost opportunity to buy more with it in the future.


In other words, "speculating".

I don't think this is a bad news just that he is trying to tell us the reality of our market. After go through this post I increased in knowledge about investment and speculations. He did not said putting your money in bitcoin is bad but you should not treat it as Investment.

I don't say it wrong but we all have different perspective. Let's say for example in investing in jewelries such as gold, diamonds, silver, & etc. It doesn't produce anything but it is considered as investment. You need to expect someone to buy in order to keep its value, otherwise its value will explicitly go down tremendously/gradually. Again, it's a matter of perspective.

Yes, what he said does makes sense, bitcoin is a speculative asset, we can't deny it, however, I don't think that speculative asset like bitcoin can have a staying power of almost a decade now. If people doesn't see anything from any asset, it will simply die down. But bitcoin is challenging how we look at an asset and that is what Warren Buffett doesn't understand because he came from a old traditional way of investing.

Did he say that to Soros though? because there are news circulating around that Soros finally decided to invest on crypto, why did he change his mind? I don't have any idea but Warren seems to stick with his notion that bitcoin will suddenly die down but so far we are still alive and breathing.

Warren buffet is actually have an other side on mind and he doesn't mind cryptocurrency still on this days he is not a fan of technology? Oh well i doubt, knowing that he invested money in bitcoins. I don't really care what words comes from him because what i see and my knowledge on this will be the next future of my life and not by his words.

it is true what he said, if not many people buy then the price will not rise, it goes into the volality, but what if it turns out that many people are buying ?? whether to lose? this is actually almost the same as gambling.

Soros has only shown his interest, but that doesn't mean he is actually going to invest in crypto. Also, he didn't point out how exactly he is planning to invest in crypto. It could very well be that he is only going to invest in financial tools tied to crypto, which a completely different division. Don't forget that most of the similar investors aren't interested in crypto itself (and thus very likely won't bother to buy crypto directly), but just the exposure it offers, and that exposure is something they can obtain through these financial tools as well.

The far majority of the traditional farts were like that in the very beginning, but it's slowly turning with how even a lot of the early day skeptics and naysayers are now seeing the benefit of today's crypto currencies, and especially Bitcoin. It was the same with how the average joes were thinking about Bitcoin. They ignored Bitcoin when it was just $200, then ignored it at $500, then $1000, then $5000, etc. In other words, their believe of Bitcoin being something that will instantly vanish or become worthless, loses significance overtime with how this ecosystem and the market develop themselves.

With all due respect to him, he's an authority on traditional investments.He's got a point that holding BTCBTCBTC is mostly speculating, because it isn't backed by a real business. So I guess his point is that we should invest in crypto-companies and not so much simply holding BTCBTCBTC.

While obviously he has more experience than most users in the forum combined at the same time he is a very traditional investor, he is not a risk taker and that has worked for him, but technically every stock that you buy you do it with the hope that is going to go up and someone else is going to pay more for it, if what he says is true about bitcoin then that is true about all the stock market.

Whether you buy real estate, stock, a business, crypto, or whatever, you're always relying on the idea that in the future other people will value it more than it is valued when you bought it. A company can go bankrupt, a house can burn down, a business can fail. Stocks are also based on the psychology of the market. A stock price will go down if it was projected to make more than it did in a given quarter even if it did well, because its all a psychological game. Crypto will go down just the same if some negative news comes out about it. Crypto is just a bit more of a pure psychological game because its based purely on market sentiment and adoption rather than market sentiment towards some external thing (the company).

Buffett doesn't understand anything about crypto and he has admitted as much, and for that reason he doesn't think it is an investment. He also stated nobody knows what it is....clearly he does not know what it is, certainly plenty of people know what Bitcoin is.

He knows how to analyze companies, he doesn't have any idea how to analyze the future possibilities of a cryptocurrency, therefore he calls its a gamble. But really its the same psychological game as the stock market. The stock market isn't based on companies, its based on what people think of the company at any given time. But you can still analyze the possibilities of a cryptocurrency. A new upgrade, a new service added, a new exchange created, a new company adopting it, a very rich person buying and promoting it, the media hyping it. All these things you can analyze to try to decide what Bitcoin will do. Just like with a company you would look at the news about the company, their earnings and other numbers and the trends of those numbers, what products they have coming out, if those products will fail or succeed, etc.

Why is it this oldmans word are being valued by some of us here?this old buffet is near to death now and whats coming from his mouth are purely hallucinations and lets accept the fact that it's worthless now,old times gone and hes not on the position now to give accurate speculations..

Yu got it there men,were just being popularized this oldman thats why many of us misleading by hes words,but not me,because eversince i enter cryptoworld i never become one of his fan

No matter what they say, we are still the one who knows how it reflects us, the time we earned from it and the investment and gamble in trading we do still matters, they might e rich now, but who knows bitcoin may give it to us soon. It was still us who will decide.

Warren is a mogul no doubt but at the same time he is not always correct. Even in the course of his life, he won't say he was all right in investment making decision and he also didn't invest in all companies of the world that turned gold mine. If this comment is anything to go by then its a good news after all considering him not calling it an outright scam but rather something so common to any form of investment and that is speculation and by making that statement, he has indirectly given bitcoin a status among investments.

I get what Warren Buffet is saying and I have a lot of respect for him and what he has accomplished. I don’t see a problem with calling it speculation when we buy cryptocurrencies. I think it’s a matter of semantics whether it’s investing or speculation. By his definition though, most people that buy stocks or mutual funds are speculating as well, rather than investing.

You know, to be a very rich person does not mean to be very smart. Warren Buffet simply does not know much about the cryptocurrency, and he does not know a lot about Bitcoin.

Warren Buffet was never right on technology price growth whether it is tech stocks and or bitcoin we no need to consider in warren buffet statements

I kinda incline to agree with warren buffet because of two main reasons.

First of all he is a value investors so when he invests into something he neeeds to calculate how much the stock worth in value and how much is the price so he could invest directly considering the price and value and if the price is lower than the value he grabs his check book and writes a big fat check to buy some of that companies stock, secondly he is really old and his way of investing has worked for him for decades now which means he doesn't need to check the new investing methods for people that are 50 years younger than him.

Students buy crypto and they are 20 year olds, warren is 80+ years old, that is 4 times the life difference so why would warren go into something that is new tech? So I agree that "bitcoin is not investing" but I agree that "bitcoin is not investing FOR HIM".

Funny enough, what he has refused to point out is the facts that even other investments that he has mentioned, at the end, you are definitely going to be expecting that someone else will be able to value it more than you have and be ready to pay more for it.

Unfortunately for him, he may not understand the real value that bitcoin creates as currency and for that reason, if he cannot see in the long run that people can easily value the usage of it than currency, then he might just be living in his own fool’s paradise.

Bitcoin is not an investment so if someone consider it as an investment and investing on it then they need to understand the risk,this is like the gambling but there are lot of people buying bitcoins on the hope that in future more people will use bitcoins so its value will increase when the adoption will get increased so the early adopters consider it as an investment strategy.

It doesn't matter much if he's right or wrong, especially when you take into consideration that the companies he invest in offer him exposure to a wide variety of industries, including tech. In other words, if tech booms as it has been doing in the last few years, he's directly profiting from it as well. It basically applies to all industries since the companies he invest in are pretty diverse in nature.

Also don't forget that Berkshire Hathaway has stakes in various banks as well, including Goldman Sachs. If Goldman Sachs manages to have Bitcoin generate insane amounts of profits eventually, Warren Buffett will again profit, and that while he (at least in the media) heavily dislikes Bitcoin.

In my own opinion, warren buffet does not have an accurate prediction, most of the people who predict cryptocurrency are not actually reaching the exact price but still the positive about the prediction is that it grows up.

You have to understand that the bitcoin market has evolved. We can argue that Satoshi wanted it to be a on-line payment method. But when people started to realized that it can be used as investments or store of value, then the whole ball game has change. That's why in the last 3-5 years, it really attracted a lot of so called investors that's why the price goes on and almost touch $20K last year.

I would love to see bitcoin being used by casual people like buying things in groceries and stuff on-line. But its not what we are seeing right now. It become a investment instrument that's why adoption is very slow. No one is actually using it but investors/traders/speculators.

Well for me its still an investment, bitcoin can give me profit, so its mean that bitcoin is an investment, its true that we are speculating, but investing in stock can also be said as speculation, for now maybe its just investment but when bitcoin already being accepted as transaction payment and people realise its technology usage then bitcoin will become very valuable, so investing in bitcoin is not only about the price but we also invest in the technology to make our lives better

Bitcoin will take food from this guy's table and that is why they are doing everything to bring it down.  For us that has benefits from cryptocurrencies and bitcoin in particular we are seeing bitcoin as investments.

They can not bring BTC down. What they will do is continue talking it down to accumulate themselves as much as they can. The smart ones of the 1% who understand Bitcoin to a certain degree, know this is a train they can not stop.

Yeah! They want to talk but they really do not even have a single clue what makes cryptocurrency what it is. It is a means of payment which actually brings some level of freedom compared to the way banks have always operated and it is more like going back to the old age of trade by barter but in this case digital form without no third party.

This is the value people will get to see eventually and would make them invest more into bitcoin and if he has failed to see that, then, he may actually be dumber than I thought.

;D ;D I doubt if it will. It is not like this man really has more years to live anyway in this world. Not like I am praying death for him, but he is getting old and we all know what happens when someone is getting close to the days of hitting the grave. However he wants to see it, I believe at this stage, no one cares.

The blockchain space has created jobs, people are getting to do well for themselves, they can easily make transactions without any issue, it is a decentralized market, and one way it is tied to a solution and if he has failed to see that value, I guess he would not be able to understand or he is simply just too old to understand.

Every market is bound to be subject to speculation, so whatever warren wants to say is not really relevant and he knows that. He just wish he was still young enough to be a part of this space, but unfortunately for him, his days are numbered and the last time I checked, no one wants to be banking their future on an old man who relatively has made huge of his money from fiat anyway.

He would rather be so concerned about the other traditional investment he has been used to, than wrap his head round something he would not even be able to understand or be a part of in the long run.