Cryptocurrencies have fallen to their lowest since November 2021 with many personal financial experts even comparing the unbridled fall to a pack of cards.
As opposed to 2021 when many new investors bet their earnings in Bitcoin, Ether and other cryptocurrency forms following multiple crypto success stories, many people have been reduced to penury owing to billions of dollars being wiped out of the crypto space.
For example, in November 2021 the value of Bitcoin had risen to $ 67,566.83. The latest price of Bitcoin is somewhere around $ $24,307.84. Similarly, Ethereum is today priced at $ 1,673.75 compared to the high of $ 4,812.09 in November 2021.
Investor confidence is at an all-time low considering how many had put in their lifetime earnings and savings. Amidst all the cacophony in favour of cryptocurrencies and the world’s largest crypto coin Bitcoin hitting the mainstream in 2021, the Chief Executive Officer of Berkshire Hathaway, Warren Buffett continued to be sceptical about its growth and continuity.
Dismissing bitcoin as “rat poison squared”
Explaining why he does not find Bitcoin investable, Buffett cited, “If you told me you own all of the bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it? I’d have to sell it back to you one way or another. It isn’t going to do anything,” adding, “Whether it goes up or down in the next year, or five or 10 years, I don’t know. But the one thing I’m pretty sure of is that it doesn’t produce anything. It’s got a magic to it and people have attached magic to lots of things.”
Ironically, many crypto investors have found innovative ways to use these coins productively, for example, through lending or using them as collateral to take loans from banks and financial institutions. Backed by inexplicable speculation, crypto coins were once the most sought-after investment options that people looked for to add to their investment portfolios till all hell broke loose and new-age investors realized them as nothing short of risky and worthless delusion.
Anticipating a bad ending to cryptos
While crypto fans brushed off all warning signs by conservative investors worldwide, Buffett labelled these coins as liabilities and a by-product of craze and misconceptions surrounding how one must evaluate investments in the long run.
Buffett shared with CNBC in 2018, “If you and I buy various cryptocurrencies, they're not going to multiply. There are not going to be a bunch of rabbits sitting there in front of us. They're just gonna sit there. And I gotta hope next time you get more excited after I've bought it from you and then I'll get more excited and buy it from you. We could sit in the house by ourselves and we could keep running up the price between us. But at the end of the time, there's one bitcoin sitting there and now we've gotta find somebody else. They come to an end.”
The famous billionaire also added, “In terms of cryptocurrencies generally, I can say almost with certainty that they will come to a bad ending. If I could buy a five-year put on every one of the cryptocurrencies, I'd be glad to do it, but I would never short a dime's worth.”, thus, putting to rest his thoughts about such phoney investments.