Bitcoin rose to $ 34,000, but this is the reason why Warren Buffett will never own Bitcoin.
Here’s what you want to know.
The value of Bitcoin, which is the largest cryptocurrency in the world, has increased by around 23% in the last five days. This is good news for Bitcoin investors and speculators. For Warren Buffett, however, this is certainly irrelevant. Why? Buffett called Bitcoin, among other names, “rat poison squared” and said that he would never buy the cryptocurrency. “I don’t have any cryptocurrency and I never will,” Buffett told CNBC in February, when Bitcoin was trading at around $ 10,000. Here are 3 reasons why Buffett will never own Bitcoin, regardless of the value of Bitcoin:
Buffett believes that Bitcoin has no underlying price. As a price investor, Buffett invests in corporations that have lower prices, that produce strong, recurring cash flows, and that have the ability to increase the price of their e-books. For Buffett, Bitcoin does not produce profits or dividends. On the contrary, the price of Bitcoin is just what a user is willing to pay for it. In this sense, Bitcoin is none other than the tulip craze of 1637. Therefore, Buffett believes that Bitcoin has no intrinsic price.
Should you buy Bitcoin? If you lately own or intend to own Bitcoin, do you have an underlying thesis for your investment? If you think Bitcoin has value, make sure you have a transparent thesis for your decision.
Should You Buy Bitcoin: Does It Have A Set Of Investing Principles? Or do you just buy what you read or listen to without doing independent research? Couldn’t you just buy Bitcoin to own it even if it doesn’t meet your same investment criteria? Of course. However, when you think about portfolio strategy, you want to see why you own a position (and if you are comfortable buying a position that you might not fully perceive).
For some, Bitcoin is the biggest investment of their life. For others, it is a speculative bubble that will sink to zero. Buffett doesn’t play in this sandbox. Why? Buffett is not a speculative investor; instead, he invests in corporations that have a wide economic gap. While everything an investment does involves a degree of speculation, Buffett’s expertise is in insurance and threat mitigation. Buffett doesn’t invest in “high-flying”, that’s not his game. His game is “buy and hold”, forever. Invest in businesses that grow over time and Array
If you are buying Bitcoin: This is a useful way to make a potentially speculative investment. The merit is simple: you make a lot of money. Like me in The Lemonade Life, focus on the cons. Are you satisfied with the fact that Bitcoin has zero value? Are you in a position to lose 100 percent of your investment?
Zack Friedman is the best-selling e-book, THE LEMONADE LIFE. Apple has named The Lemonade Life one of the “best audiobooks of autumn” and a “must-have. “
Zack Friedman is the best-selling e-book THE LEMONADE LIFE. Apple has named The Lemonade Life one of the “best audiobooks of autumn” and a “must-have. “Zack is the founder and CEO of Make Lemonade (www. makelemonade. co), one of the leading online non-public financial corporations that allows him to live a larger monetary life. He is a highly sought-after speaker and has encouraged millions of others through his difficult ideas, adding more than 150 million people who have read his advice. Previously, he was CFO, hedge fund investor and worked at Blackstone, Morgan Stanley and the White House. Zack graduated from Harvard, Wharton, Columbia and Johns Hopkins.