The billionaire investor and his longtime manager Charlie Munger, two of the world’s most successful investors, say they’d never invest in cryptocurrencies

Billionaire investor Warren Buffett said Wednesday that he would never invest in Bitcoin or other cryptocurrencies, and predicted the wildly popular assets are in for a fall.

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“I can say almost with certainty that cryptocurrencies will come to a bad end,” Buffett told CNBC in an interview.

Buffett’s comments were backed by Charlie Munger, his longtime partner at his investment company Berkshire Hathaway, who described the soaring values of Bitcoin and the other cryptocurrencies as “bubbles”. Munger said investors “are excited because things are going up at the moment and it sounds vaguely modern. But I’m not excited.”



Q&A What is bitcoin? Show Hide Bitcoin is the first, and the biggest, 'cryptocurrency' – a decentralised tradeable digital asset. The lack of any central authority oversight is one of the attraction. Cryptocurrencies can be used to send transactions between two parties via the use of private and public keys. These transfers can be done with minimal processing cost, allowing users to avoid the fees charged by traditional financial institutions - as well as the oversight and regulation that entails. This means it has attracted a range of backers, from libertarian monetarists who enjoy the idea of a currency with no inflation and no central bank, to drug dealers who like the fact that it is hard (but not impossible) to trace a bitcoin transaction back to a physical person. The exchange rate has been volatile, making it a risky investment. Whether it is a bad investment is yet to be seen. In practice it has been far more important for the dark economy than it has for most legitimate uses, but with Facebook's announcement that it is launching a new digital currency - Libra - mainstream interest in bitcoin has surged.



Munger has been a persistent critic of cryptocurrencies, which have soared in value in recent months. Last year he said the soaring values of the currencies was “total insanity”.

He told an audience at the University of Michigan’s Ross School of Business: “I think it is perfectly asinine to even pause to think about them. It’s bad people, crazy bubble, bad idea, luring people into the concept of easy wealth without much insight or work.”

Buffett’s comments came as the 87-year-old announced he had appointed two potential successors: Gregory Abel, the chief executive of Berkshire Hathaway Energy, and Ajit Jain, Berkshire’s reinsurance chief.

The critique from two of the world’s most successful investors comes as more companies are piling into cryptocurrencies. On Tuesday Kodak announced that it would launch its own cryptocurrency, KodakCoin, in a move that doubled the struggling company’s share price.

Kodak, which emerged from bankruptcy in 2012 and has struggled to regain its footing ever since, said the move would allow photographers payment for licensing their work using KodakCoin.

Tiny US soft drinks firm changes name to cash in on bitcoin mania Read more

The cryptocurrency halo has been good for other companies too. Last month, shares in a tiny US soft drinks company quadrupled after it changed its name from Long Island Iced Tea Corp to Long Blockchain Corporation – referencing the ledger technology upon which bitcoin and other cryptocurrency transactions are based.

The company said it planned to raise $8.4m in a stock offering and use some of the cash to invest in bitcoin mining machines. This week it announced it is scrapping the stock sale but still plans to buy the machines. However, it did not specify how it would pay for them.



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