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Interesting to read Warren Buffet's and venture capitalist Fred Wilson's opposing views and thoughts on the global growth of Bitcoin & Crypto as fiat currencies continue to devalue across the world.
By Jamie Redman - Bitcoin.com
For many years, the business tycoon Warren Buffet has condemned bitcoin as an investment telling people that the crypto asset is nothing but gambling. Two years ago, just before a Berkshire Hathaway 2018 annual shareholder meeting, Buffet said bitcoin is “probably rat poison squared.” Despite the investor’s criticism, the crypto asset’s market capitalization has surpassed Buffet’s multinational conglomerate holding company, Berkshire Hathaway, in net value.
Bitcoin has a lot of haters, including people like Jamie Dimon, Peter Schiff, and Nouriel Roubini. In addition to these pundits, the American investor and chairman and CEO of Berkshire Hathaway, Warren Buffet, doesn’t like bitcoin either. For many years now, the executive who developed an interest in business and investing in his youth has disliked bitcoin (BTC) with a fervent passion. Two years ago, Buffet explained that purchasing the crypto asset is not an investment.
“You aren’t investing when you do that,” Buffett stressed in 2018 during an interview in reference to buying bitcoin.
“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.”
Then during a discussion with CNBC’s Becky Quick, Buffet further explained that bitcoin is “probably rat poison squared.” Moreover, on Valentine’s Day 2018, Buffet’s partner and Berkshire Hathaway’s vice chairman, Charlie Munger, said he detested bitcoin. During the company’s annual shareholder meeting Munger said the crypto asset was “noxious poison” and “disgusting.”
“I never considered for one second, having anything to do with [bitcoin],” Munger insisted. “I detested it the minute it had been raised. The more popular it got, the more I hated it. It’s just disgusting that people have been taken in by this.”
Despite the bigwigs at Berkshire Hathaway hating on the crypto asset bitcoin (BTC), the digital currency has surpassed the multinational holding company’s net value according to statistics. Bitcoin’s value anywhere above the $29,300 per unit range gives BTC’s market valuation a whopping $544 billion, which is $1 billion above Berkshire Hathaway’s capitalization.
The next major company BTC needs to pass is Taiwan Semiconductor Manufacturing (TSMC), the largest semiconductor manufacturer in the world. Bitcoin has already surpassed the valuation of the major payments network Visa, which is valued at roughly $482 billion.
The conglomerate Berkshire Hathaway is basically a lot of companies as well, as the holdings firm wholly owns well known businesses like Dairy Queen, GEICO, Duracell, Pampered Chef, Fruit of the Loom, and more. Berkshire Hathaway also has significant minority holdings in Coca-Cola, Bank of America, Apple, and American Express.
Since Bitcoin’s launch on January 3, 2009, 12 years ago, the currency has grown immensely in value and traditional investment tycoons have had a difficult time processing why it has grown so valuable. Still to this day, people like Peter Schiff and Warren Buffet believe that bitcoin is nothing but a pyramid scheme.
“If you buy something like a farm, an apartment house, or an interest in a business,” Buffet once said.
“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.”
Article produced by Jamie Redman
Famed venture capitalist Fred Wilson says the crypto sector is shaping up to be one of the most significant elements of the global economy.
In back-to-back blog posts, the Union Square Ventures CEO reviews 2020 and makes his economic predictions for 2021.
While Wilson laments the economic devastation that lies in the wake of the Covid-19 pandemic, he also touches on some of the sectors of the economy that have benefited from the viral disaster in the past year.
“While it is inarguably the case that 2020 was a terrible year with a global pandemic, racial strife and ugly politics in the US, and an economic downturn that is impacting exactly the people who have already been hurt the most, it was an inflection point for the tech/startup/VC/crypto sectors and a very significant one.
These sectors, which had been growing in their global importance over the last twenty years, all of a sudden have emerged as the most important sectors of the global economy.”
Wilson highlights the growth in popularity of Zoom, electric vehicle companies and technology based commerce solutions as examples of this rapid shift in industry valuations.
Although Wilson believes this shift was already on the horizon, he says the Covid-19 pandemic sped up the process immensely. With many people at home and nothing to do, rich with stimulus money, tech stocks and crypto assets ballooned.
The famed investor suggests that while Tesla and Bitcoin may currently be in speculative bubbles, the attention they have garnered will help those and other rapidly growing assets achieve widespread adoption much faster than they otherwise would have.
“There is no question that crypto is in yet another speculative bubble, but like I said, it is speculative bubbles that allow emerging technologies to go mainstream and finance themselves.
Odd as it may seem, a lot more people want to buy Bitcoin at $28,000 than wanted to buy it at $5,000. That’s just how things are. And it is important to understand that.”
As for Wilson’s 2021 predictions, he believes the Covid-19 pandemic will end some time in Q2, but many of the trends that became popular during quarantine, such as working from home, ordering in, and consuming media in the comfort of people’s living rooms will remain prevalent.
Additionally, Wilson says that although the major threat of the virus will be diminished, the US will be sorting out the economic repercussions of the pandemic for the next decade along with the looming climate crisis.
Wilson predicts that the government will primarily respond to those lasting economic pains by printing more fiat money and protecting increasingly irrelevant financial institutions, which will accelerate the need for and growth of the decentralized finance (DeFi) sector, highlighting the popularity of projects such as yearn.finance, Compound, and Uniswap, which is backed by Wilson’s VC firm.
“I believe that governments will respond to all of these economic challenges by continuing to print fiat money without restraint and by taxing and regulating innovative new companies to protect old and dying companies. This will lead investors to continue to allocate capital to new forms of money (crypto) and new ways of creating and financing innovation (decentralized projects and organizations).
We are already seeing that happen in the finance sector, with breakout projects in decentralized finance in 2020 like Compound, Yearn, and Uniswap (a USV funded project). We will see this approach accelerate in 2021 and expand into areas beyond the financial sector. The idea of financing and executing innovation inside of a global decentralized autonomous organization is such a powerful idea and one whose time has come.”
Article produced by Daily Hodl Staff
