Warren Buffet denounces bitcoin – do we even care?

There used to be a saying in the finance industry that went something like “when Warren Buffet speaks, you listen.” After all he is the third richest man in the world, behind Jeff Bezos and Bill Gates. And as the head of Berkshire Hathaway, one of the biggest investment firms globally, he has made a fortune over the years.

But when he says that bitcoin is a delusion that attracts charlatans, as he did in an interview with CNBC last month, you have to think twice about taking him seriously.

Let’s remember that Buffet is 87 years old and may have been a success in the investment industry, but he has also been tone deaf when it comes to the tech industry. Despite being worth $84 billion and being one of the most influential people in the business world, he himself admitted that missing out on Amazon and Google as investments when they launched was a huge mistake. He is known to be unaware of the tech industry and has never been an investor therein.

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That being said, he did have a change of heart in recent years when his company made a sizable investment in Apple stock. So sometimes you can teach old dogs new tricks.

Buffet and his second in command, Charlie Munger who is himself over 90 years old, have both been very critical of bitcoin since 2014. However, one of their leading disciples, Chamath Palihapitiya, is a crypto enthusiast and investor and he believes that the two skeptics are wrong about bitcoin, stating that “technology is not in [Buffet’s] circle of competence.” So not everything the “Oracle of Omaha” says is to be taken as gospel. If he can be so wrong on Amazon and Google investments, then he can most certainly be wrong on crypto. Bitcoin is so revolutionary and avante garde, while Buffet is so old-school, literally and figuratively, that their worlds just don’t intersect.

Let’s remember that Buffet and Co represent the establishment.

They are so ingrained in the current system that they are unable to see something as radical as bitcoin as a worthwhile investment at all. They also have too much vested interest in the old order to be willing to acknowledge bitcoin for what it is – the original blockchain and a digital store of value. Buffet has prospered in an institutionalized system which is based on cronyism, centralized trust and manipulation, as well as custody, control and intermediaries.

Bitcoin has none of that and so is alien to them.

According to some, the last time Buffet really made big profits was when he benefited from the 2008 financial crisis. He was cleaning up while millions of people were losing their life savings and their hope for a better future. You don’t have to be an “oracle” of investments when you have insider information from the government, the Treasury and the Fed Chairman all warning you that they are going to bail out certain stock companies with public tax payer money. Buffet is the epitome of today’s crony capitalism.

And bitcoin stands as a symbol against all of that, which is why he doesn’t like it.

That’s why he calls it a mirage and tells people to stay away from it, that it will end badly. The irony is that he personally also admitted that he knows nothing about bitcoin. He once said that it was a means of payment but that it was therefore only as good as a check or a wire transfer, despite acknowledging that it may be anonymous in the same statement.

Do people even use checks anymore?

It’s not easy to keep up with technology when you’re 87.