Microsoft Corp. (MSFT) co-founder and philanthropist Bill Gates joined his fellow billionaire investors on CNBC's "Squawk Box" on Monday, indicating that if there was an easy way to bet against bitcoin, the world's largest cryptocurrency by market capitalization, he would.
Charlie Munger, called bitcoin "worthless artificial gold" on the CNBC segment, following up on remarks his long-time business partner, Warren Buffett, made at Berkshire Hathaway Inc.'s (BRK.A) annual shareholder meeting this weekend. Buffett dubbed bitcoin "rat poison" in a speech to tens of thousands of attendees. (See also: Berkshire Hathaway Has Exited IBM: Buffett.)
“Bitcoin and ICOs, I believe completely they're some of the crazier, speculative things,” said Gates. When asked if he owns any of the digital currency, he indicated that someone gifted him bitcoin for his birthday once, and he sold it a few years back.
Gates Invokes the 'Greater Fool'
“As an asset class, you're not producing anything and so you shouldn't expect it to go up. It's kind of a pure 'greater fool theory' type of investment,” the tech entrepreneur told CNBC. Despite issues with bitcoin, Gates said that the underlying blockchain technology, is "a good thing" and a positive for various use cases such as sharing data bases and verifying transactions.
Berkshire CEO Warren Buffett offered his input, suggesting that if people react or get mad when you criticize their investment, it means that they're gambling. He said that if somebody where to criticize Berkshire, or Apple Inc. (AAPL), in which the Omaha-based conglomerate owns a 5% stake, he and Munger wouldn't care, because they would not view the comments as hurting the value of their investments. On the other hand, if they criticize bitcoin, their remarks are seen as negatively impacting the value of the digital currency, since its investors just want the price to go up the next day, explained Buffett.
Comments made on bitcoin from a handful of the world's highest-profile investors come as the price of one BTC trades around the $9,300 mark on Monday morning. The highly volatile digital currency soared past the $2,000 mark in 2017, reaching highs near $20,000 in mid-December and crashing again below $6,000 amid a greater market sell-off earlier this year. (See also: Buffett: I Was Wrong on Amazon, Google.)
Investing in cryptocurrencies and 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 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 cryptocurrencies.