© Reuters.
By Carjuan Cruz
Investing.com – The tumble was so steep that it neared $20,000 yesterday, amid a tough year for cryptocurrencies, stocks and bonds. The capitalization of the cryptocurrency market is now less than 1,000 billion dollars.
The leading digital asset has racked up losses of nearly 70% since its November highs, when it nearly touched $70,000. With the rapid and high growth reflected in its price, the digital asset was presented to investors as an option for big gains.
But Warren Buffett, the famous and widely followed investor and CEO of Berkshire Hathaway B (NYSE:), has never been tempted to invest in bitcoin and, on the contrary, has always claimed not to be interested. According to a MoneyWise report, here are the top three reasons why the finance mogul has always ruled out the possibility:
- It is an unproductive asset: according to the expert, the value of bitcoin comes from the optimism that someone else will be willing to pay more for bitcoin in the future than they are paying today today. And Buffett prefers money that comes from production. “It has no unique value.
- It is not a durable medium of exchange or a store of value. And, according to Buffett’s statement, crypto cannot be considered money: “It doesn’t pass the test of a currency. It’s not a durable medium of exchange, it’s not a store of value,” the billionaire said. For now, it is a tradable asset.
- He admits he doesn’t understand. Buffett always maintains an investment position in what he understands, how it works, and how it makes money. He adds that investors can make the mistake of getting excited about what they don’t understand, which is why he prefers to be cautious: “If you don’t understand, you’re much more excited than if you understand. You look at something and you’re like, ‘this is magic'”.