Buffett: Cryptocurrency Will Come to a Bad End

The heated debate around cryptocurrency, most notably bitcoin, the largest digital currency by market capitalization, has created an intense debate among some the most prominent names in the financial world. While some have gone as far as to call cryptocurrency investors "stupid" and bitcoin a "fraud," others are funneling their wealth into the high-flying currencies, betting on vehicles like bitcoin, ethereum and Ripple surging as the future of payments. This week, billionaire investor Warren Buffett appeared on CNBC, the latest to offer his outlook on the volatile cryptocurrency market. (See also: Bitcoin Funds Made 3,000% Profit in 2017: HFR.)

"In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending," stated the chair and CEO of Berkshire Hathaway Inc. (BRK.A), who is also the world's third richest person after Amazon.com Inc.'s (AMZN) Jeff Bezos and Microsoft Corp.'s (MSFT) Bill Gates. 

While Buffett suggests that it is not clear when or how the inevitable crash will occur, he said, "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." He reiterated that Berkshire Hathaway does not own any cryptocurrency, does not short any and will never have a position in them. 

"I get into enough trouble with things I think I know something about ... Why in the world should I take a long or short position in something I don't know anything about," added Buffett. 

Diverging From Dimon

Also on Wednesday, the business mogul's Omaha-based conglomerate announced the appointment of two new vice chairs, Gregory Abel and Ajit Jain.  

Buffett's remarks on the digital currency frenzy come just after JPMorgan Chase & Co. (JPM) CEO Jamie Dimon said in an interview with Fox Business that he regrets making some harsh statement regarding bitcoin last year. "The blockchain is real," stated the bank's top executive, who added that he remains concerned over some controversial initial coin offerings (ICOs) and regarding government action as the cryptocurrency market explodes. (See also: JPMorgan CEO Dimon Regrets Calling Bitcoin a Fraud.)

Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author [owns/does not own] cryptocurrency.

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