The cryptocurrency community didn’t exactly praise Warren Buffett for his latest comment on Bitcoin. In an interview with Yahoo Finance, Buffett said that buyers of Bitcoin aren’t investing but speculating. They don’t believe in the productive value of the thing they’re buying, but only in that they later can find an even greater sucker to charge a higher price from, basically.

The storm of critique this interview was met with should have surprised no one. People are emotional. Even more so when it comes to money. When our investments come under attack, it’s only natural that we go into a defensive mode. Thus we mutter about this rich guy saying he knows better, just because he made some good investments in insurance companies fifty years ago. Sure, he is the third richest man in the world, but he has missed out on practically all new technology, be it Amazon, Netflix or Microsoft. This time, however, it could be wise to listen to the sage of Omaha even on tech.

You see, Buffett didn’t talk about the technology of Bitcoin. He commented on the differences between speculation and investment, a subject he is very familiar with. The point he makes about the non-financial character (no dividends!) of Bitcoin deserves more attention. Since Bitcoin was created only to become money, it is an all or nothing play. Either Bitcoin becomes money in the future and it thereby justifies it current price, or it collapses. A profitable company doesn’t have to conquer the world, but can provide happy share holders with nice dividends even though it is yet to crush all competitors. Also, to a certain extent the dividend gives the share price stability.

Despite the nice qualities of the stock, nearly all cryptocurrencies have gone the other way, raising questions about how to determine the value of a cryptocurrency or even whether the cryptocurrency actually does something valueful. Luckily, things are about to change. The company PinkDate is currently in the process of an ICO which resembles an IPO. Their coin is not meant to be used as a currency or a store of value — it represents ownership in the company and the right to a dividend. They have promised to give 50% of their earnings as dividends. Finally, a cryptocurrency which can be valued! According to their own projections, they will make $30M in 2021, which would mean an earnings per share of approximately $0.2, and given the current offering price of $0.588 per share would establish a P/E of about 3.

Between a stock with a P/E of 3 and a highly valued coin with no earnings, what would Buffett choose? We must say PinkDate. He wouldn’t do it because he gets the technology, but because he believes in the finance. (Mr. Buffett would perhaps think over the investment twice if he knew that the company will make their earnings through their escorting platform, but still, a P/E of 3 in a good business, how could one resist?)

This development ought to scare some Bitcoin maximalists. When value investors enters the space, we will see resources shift from expensive coins without earnings to cheap coins with potential for good future earnings.

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