Banking & Finance

Even Warren Buffett Hates Bitcoin

How many warnings have you seen about Bitcoin being a charade or having serious risks? It has to be more than can easily be counted. After FINRA warned this week, after Alan Greenspan and Nouriel Roubini, and a host of other market pundits and regulatory bodies have warned, now Warren Buffett of Berkshire Hathaway Inc. (NYSE: BRK-A) is out with a warning against Bitcoin.

On a Friday appearance on CNBC, Warren Buffett warned that Bitcoin is a mirage. He said, “Stay away from it. … It is a mirage basically.”

Buffett’s issue with Bitcoin, which is just one of the same things we have warned about, is that there is no intrinsic value of Bitcoin.

Our own warning is that, outside of there not being any regulatory body or customer service center (you know, in case your bitcoins turn up missing), Bitcoin misses all the hallmarks of a real currency. The currency of a nation is backed by the full faith and credit of that nation, it has a government that can regulate it, the government can tax its citizens and businesses, and it has laws governing its citizens and people in the nation. They also generally have an army to enforce the interests of the nation.

Bitcoin does not fit a single one of those criteria. No one even really knows who is behind Bitcoin. Is it a Russian mob creation, a CIA or NSA effort, or is the mythical Satoshi Nakamoto actually some real guy out there flying under the radar and off the grid?

Bitcoin has lost two exchanges now. Imagine if you went to buy or sell shares one morning and the NYSE or Nasdaq had a warning: “Sorry, we have been hacked and are out of business. We are working on the matter and will provide updates as soon as possible.”

Warren Buffett may be prejudiced against Bitcoin because he may not understand it. Still, he is right — the intrinsic value of Bitcoin is less than what you put in your toilet.

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.