Why Warren Buffet Avoids Cryptocurrencies Despite Their Hype #CriptoNews

Investing in cryptocurrency is not for the faint of heart because it’s subject to so much volatility. Even the leading crypto, Bitcoin, has been through more than its share of choppy waters. That volatility — coupled with the fact that crypto investor sentiment is often driven more by hype than business fundamentals — helps explain why legendary investor Warren Buffett tends to avoid the asset.

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In 2018, the Berkshire Hathaway CEO told shareholders that Bitcoin is “probably rat poison squared,” Fortune reported.

That same year, Buffett expanded on those thoughts in an interview with CNBC:  “In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending. We don’t own any, we’re not short any, we’ll never have a position in them.”

In the years since, cryptocurrency has experienced numerous ups and downs. But lately, things have been more up than down — thanks in large part to the election of President Donald Trump, a crypto enthusiast. Bitcoin’s value has risen about 30% since Nov. 4, 2024, the day before the election.

As Fortune reported, even Buffett himself has dipped his toe into the crypto market, if only indirectly. Four years ago Berkshire invested $500 million in Nu Holdings, a Brazilian banking firm with its own crypto platform. Berkshire later invested another $250 million.

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Granted, those are not huge sums of money for Berkshire Hathaway, which has a market cap of about $1 trillion. Given Buffett’s overall opinion of crypto, you probably shouldn’t expect him to make huge bets on the asset anytime soon. As recently as 2022, the Oracle of Omaha continued to offer sharp criticisms of Bitcoin, Benzinga reported.

“Now if you told me you own all of the Bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it?” Buffett reportedly told Berkshire Hathaway investors three years ago. “I’d have to sell it back to you one way or another. It isn’t going to do anything.”

In its defense, cryptocurrency has been embraced by a growing number of companies worldwide that use it for various investment, operational and transactional purposes, according to a report from Deloitte.

“Merchants are embracing digital currency payments with the hope of gaining a competitive advantage in the market and in the belief that the use of digital currency will continue to expand,” Deloitte noted.