What was Warren Buffett’s new talk about Bitcoin ? Warren Buffett is against Bitcoin and cryptocurrencies. He has already said that Bitcoin has no intrinsic value and is similar to gambling. It is interesting to know that Warren Buffett has removed Bitcoin from his investment portfolio and has shown interest and confidence in investing in Bitcoin. It does not have coins or other digital currencies.
What does Warren Buffett say about Bitcoin
Warren Buffett is not a big fan of Bitcoin and has made this clear in many of his interviews. It seems that this way of thinking caused the loss of at least 320 thousand percent of potential profit in his investment portfolio.
Legendary investor Warren Buffett sees no value in Bitcoin and has infamously called it rat poison. But some data suggests that adding bitcoin to his portfolio, which is an equally weighted portfolio of Berkshire Hathaway, Microsoft, JPMorgan and BlackRock, has yielded much better returns for the Oracle of Omaha. In fact, the addition of Bitcoin to this portfolio could have improved its performance.
According to an analyst, if Warren Buffett had allocated 2.5% of his investment portfolio to Bitcoin every year since 2014, the return would have increased by 20%, along with reducing risk. Currently, the portfolio yield is around 16%.
Despite Bitcoin’s notorious price volatility, Bitcoin’s correlation with stocks such as Berkshire Hathaway, Microsoft, JP Morgan, and BlackRock is very low, which would make it reasonable to allocate a percentage of the investment portfolio to Bitcoin and reduce risk.
For example, during the bear market of 2021-2023, allocating Bitcoin to an investment portfolio could offset up to 10% of the losses incurred.
In other words, Bitcoin usually offsets losses caused by bearish movements in said stocks. Therefore, allocating a small portion of the investment portfolio to Bitcoin could be a logical hedging strategy to offset potential negative returns.
Bitcoin has outperformed Berkshire Hathaway by 320,000%. Bitcoin proponents see it as an alternative to traditional safe-haven assets such as gold. This view is due to the fixed supply of 21 million bitcoins and the anti-inflationary property of this cryptocurrency.
This mindset has attracted many people to buy Bitcoin as a way to counter excessive money printing by central banks around the world. For example, the number of non-zero Bitcoin addresses has increased from around 2,500 in 2009 to over 45 million in 2023.
Despite this, Buffett recently said that Bitcoin is gambling and noted that “it has no intrinsic value, but that does not prevent people from wanting to enter this market”. Keni Kiyosaki is one of the Bitcoin investors who we have seen interesting predictions from.
However, the veteran investor still has some presence in the cryptocurrency market through his popular investments, such as Nubank, which provides crypto-related services in Latin America.
Bitcoin experienced a sharp drop in 2022, but in 2023 it managed to record a growth of more than 90% and is currently about 60% away from its price ceiling of $69,000.
What Warren Buffett says about Bitcoin actually proves his opposition to Bitcoin and it is not strange that every technology that is used in the world has undoubtedly had its opponents and supporters. What is your opinion about Bitcoin
