Crypto pulls back largely based on the remarks of a couple finance legends

in cryptocurrency •  5 months ago

After bitcoin got breathtakingly close to the $10k mark, a couple of finance legends decided to offer their thoughts on the coin.

Which likely contributed to bitcoin falling close to 10% from peak to trough in the last day and a half.

Who are these "legends" and what did they say exactly?

(Source: https://www.cnbc.com/2018/05/04/warren-buffett-invests-for-the-long-term.html)

First up was none other than Warren Buffett.

The Oracle of Omaha.

He is considered by many as the greatest investor of all time, and with good reason. He is a self made billionaire mostly related to his investing abilities.

At his annual shareholder meeting this weekend, Warren Buffett said:

"bitcoin is probably rat poison, squared."

(Source: https://www.cnbc.com/2018/05/05/warren-buffett-says-bitcoin-is-probably-rat-poison-squared.html)

Pretty strong words from the old Oracle!

Though that shouldn't be all that surprising as he has been a bitcoin bear for some time now. A few months back he said that he would gladly buy 5 year puts on bitcoin but wouldn't short it because he is certain it will end badly.

Next up was none other than Bill Gates.

Another in the top 5 list of wealthiest people on the planet.

Bill Gates said on Monday (today) morning:

"I would short bitcoin if there was an easy way to do it."

(Source: https://www.cnbc.com/2018/05/07/bill-gates-i-would-short-bitcoin-if-i-could.html)

These are a little more surprising remarks coming from the creator of Microsoft.

Well guess what, I have some good news for you Mr. Gates, you can short bitcoin!

In fact, let me point you in the right direction. You can short it on bitmex.com. Here's the link to get your account set up today:

https://www.bitmex.com/register

Short as much as you want!

(Source: https://www.cnbc.com/2018/02/16/bill-gates-artificial-intelligence-is-good-for-society.html)

Now that those two market moving statements are out of the way, lets look into them for some context.

The first one from Buffett about bitcoin being like rat poison squared is really not all that surprising coming from him.

After all, this is the same guy that hates derivatives, told people not to invest in Amazon, and didn't trust the whole internet tech boom of the 90's.

Basically, he sticks to what he knows and discounts anything he doesn't.

His main beef with bitcoin was that it doesn't generate any cash flows. The same complaint he levies at gold. Which he went on to mention right after his statement about bitcoin at his annual meeting.

His point being that if you held gold from the time of Christ until now, your annual percentage returns would be fractions of percents.

However, if you were able to invest in things that paid dividends or had cash flows over that same time period, your returns would be exponentially higher.

To be honest, he is not wrong.

Gold and bitcoin do rely on someone paying more for them than you did for them to go up.

However, that hasn't stopped gold from being a store of value and it has been finding buyers for thousands of years.

In my opinion bitcoin is going to do just that.

It does everything that gold does, only better. It's transferable, it's divisible, it's limited and scarce, and it's not controlled by any central authority.

All great things one would look for in a store of value.

Bitcoin may never generate cash flows or pay dividends, but it has a place as a store of value.

(Source: https://news.bitcoin.com/peter-schiff-bitcoin-digital-fools-gold/)

Moving on to Bill Gates...

His comment about shorting bitcoin is a lot more surprising to me.

First of all, Bill Gates is not a trader nor is he really an investor, at least not to the degree of Warren Buffett.

Bill Gates is an inventor and creator of technology.

He is certainly skilled in that aspect and that is his specialty.

However, taking investment advice from him would be akin to taking investment advice from Tiger Woods.

Nothing against Tiger, I am sure he is a decent investor of his money, though my point is that he is a professional, just not a professional investor.

In this instance I would take Bill's advice over how to build my next operating system well before I would take his advice on where I should invest my money.

That being said, I sincerely hope Bill Gates does find a way to short bitcoin because him covering that short position would be major fuel added to the fire when bitcoin ultimately starts making a big move higher.

There are some investing professionals that are worth listening to, though I don't think I would classify Bill Gates as one of them.

Stay informed my friends.

Follow me: @jrcornel

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Sadly the fact that the words of individuals can cause such havoc on a market shows that it is far from ready for the big time.

Also why do they only speak up as things are rising?

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Good question. Why do they need to have an opinion at all on something they don't really understand or are invested in?

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This is the part that gets me the most. I want to know how much they secretly own.

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I think they aren't talking about bitcoin when they are talking about bitcoin. They are talking about the cryptocurrency market as a whole. They just don't understand it. I would also go as far as to say that more than 1000 currencies will come to a bad end. Which even sounds ridiculous. Why the heck do we have about 1600 listed currencies?

I personally regard Warren Buffett highly and he has been an inspiration for my investment strategy. However, I don't invest in the companies he invests in these days. Times are changing. However, I think it is good that people like him speak up when it comes to investing in highly volatile markets, so that people understand that if they buy the ICO that hasn't launched yet, they might never again see their money. Just because they don't get all their facts right, doesn't mean that what they are saying is completely wrong. The people who listen to them blindly, are better off not investing into crypto anyway, at this point.

Just my two cents.

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That's sort of a dumb question. If these guys don't understand something they can hire the best of professionals to get the answers.

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Correct, so why not wait till you are more well informed to state your strong opinions publicly?

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You are quite right, it is very sad that comments from old cargos like this could cause such ripples. Really unfortunate.

Excellent analysis! Buffet used to think only fools invested in Tech. Now he has become that fool. Can you say APPLE?

Gates is probably just pissed that he didn’t invent Blockchain Technology; it would seem to have been right up his ally. Too bad he missed the boat 🚣‍♀️ on that 🤪

Very hysterical how whales manipulate the information given to the public and make everything overdramatic to justify why there is a massive sell off in the markets. Yes, Bill Gates and Warren Buffet are highly knowledgable in their expertise, but their opinions should not discourage or fool any crypto technology enthusiast to sell off.

Bill Gates and Warren Buffet focus is on things that exclude cryptocurrency. Yes, they are highly intelligent people, but there daily focus does not evolve around cryptocurrency! So we should not take their opinions heavily.
@jrcornel

Bill Gates

Warren Buffet is against everything progressive. He had same outlook for IT companies for the longest time.

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Said not to touch Amazon and that the business could never work long term.

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Glad i never followed his advise in stock market :)

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Buffett missed the Apple IPO in 1980, and the first iPhone... he finally invested in May 2016

Aaayeeee! Milions!

Not for nothing, but when a "mainstream" economist says something negative about crypto, it oughta be perceived as a positive. If they thought a decentralized system had value, they'd of come up with it by now. Plus, if a decentralized system is a threat to their dominance, they'd have nothing but negative to say about it. I remember back when bitcoin's market cap was in the tens of millions. It was a utopian idea that it'd one day mount any kind of threat to, let alone be noticed by, the mainstream finaincial power structure. Fast-forward about 5 years and now they're getting pretty vocal. Seems like 5 years from now, the crypto early adopters will be the ones calling the shots.

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Absolutely right!

Thank you for the post @jrcornel and hopefully Bill takes your advice! At times over the decades I have found Buffet contradictory, possibly intentionally. I saw him slammed the Junk Bond Market and DBL but then benefit directly and indirectly from such. For a blue chip investor like BRK, its interesting to note that Buffet hold's a different opinion than many of the firms he has hired and some of the DJIA companies who have embraced crypto. Here is a somewhat dated Post I did that may be of interest.

Poor old Bill is showing his age isn't he?
Hell he's five years younger than I am.

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Ha, really?

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yup.
from the picture he looks ten years older than me.
instead of five years younger.
Perhaps it's that PlayBoy bunny he married?

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It's probably all that evil he's into. Ya know, all that depopulation stuff and being a member of Lucis Trust.

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(rolls eyes)
yeah..that's IT!

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You're just less aware of how evil the globalists are. Did you read the Wikileaks Podesta files or the JFK files that Trump declassified? It sounds like you still believe that the mainstream media controls reality.

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It sounds like you making some invalid assumptions..

He keeps talking like the Governments will ban it saying shit like, "if the Governments ban trading Crypto it would not be worth anything". Clearly this old man does not understand blockchain nor most any technology. I know from personal experience listening to this old technophobian Great Grand Father, it cost me big in 2010 when I bought into Neflix and Google (my first stocks ever bought) and dumped it for "value stocks" after reading several of his books. Never again I listened to this fool. Sure some of the advice he gives about being fearful when others are greedy is good but a lot the stuff these days that qualify for value investing are turning out to "value traps"! The rate at which technology is disrupting traditional businesses is only accelerating. Now we have biggest hotel in world with no hotels, biggest taxi in world with no taxis and now biggest bank in world with no actual banks! If I kept listening to this ol' man I'd be broke! :-)

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Well said. Just because something worked for him over the last 50 years doesn't mean it will work that way over the next 50 years. Also, like your experience, he told people to not touch Amazon when it was worth dollars, look how that advice worked out.

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The fact that he still expects bitcoin trading to be shut down further goes to show how little he knows about these markets.

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"Dumped Netflix AND Google" OUCH! Dude, you must hate him now!

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Indeed. I learned from experience very early on to go with what your gut is telling you (based on your own independent research) and not what has worked for someone else 50 years ago! MSM is deceptive by purpose. When I bought Google and Netflix in 2010 it was purely based on a mega trend I saw developing for years. Online movies and online marketing - Netflix and Google were leaders at the time and they still are today at 12X their respected stock prices! Thankfully, I learn from my mistakes quickly. Found Crypto in its early stages and never looked back.

Warren Buffett is so bearish about Bitcoin, but hasn't he heard about gold?!

Hopefully the day comes soon when Crypto's do not react to such nonsense. But machines and weak hands will always react first I suppose.

They know nothing

The problem with Warren and Gates is that they are still stuck in the 20th century and are not willing to evolve with the times.They should keep their opinions to themselves as it doesn't really benefit today's emerging market.

These kind of events don't cause market moves. At most, they catalyze moves that are already in the cards.

Guys, if you want to have a look and get some information in a good ICO that will start in short period of time, I can suggest you RAWG.

The ICO site is this one: https://token.rawg.io/.
It's a video game discovery platform that converts your skills into goods and services.

You can earn tokens by playing your favorite games. The site is already working, with more than 50,000 games in the database and new games are getting added every day. This is the site: https://rawg.io/

Quite good looking, don't you think?

Have a look. I hope this information is helpful.

yes he has a good point but he is alsow missing the point. its not on the asset u can lift away its what the blockchain can do in the future.

Thanks @jrcornel for your post. Ash has accepted your bill! For several decades I have found Buffett's controversy, maybe deliberately. It seems interesting to blue-chip investors like BRAC that is different from one of its tenant companies and some of the companies involved with the cryptos.
DQmSHPN9YisEkq8QLpywF47rFEraSVN94fP5m5bVF7F4YpK_640x480.png

Words from the great Jimmy Cliff that apply to what we're seeing.

Well the oppressors are trying to keep me down
Trying to drive me underground
And they think that they have got the battle won
I say forgive them Lord
They know not what they've done
'Cause as sure as the sun will shine
I'm gonna get my share now of what's mine
And then the harder they come
The harder they'll fall, one and all
Ooh the harder they come
The harder they'll fall, one and all

Let them say whatever they want to say, i believe that the future is much more longer than the past. Non of the two will exceed a hundred year. We the CRYPTORIANS are patient and have a fearful and dominating number. If bitcoin and and cryptos gave survived this far, then nothing this people will say is going to make considerable difference. Cryptocurrency all the way.

I think that Buffett and Gates comments could be having an effect but I think the bigger factor at play today is regulatory,” said Spencer Bogart, partner at Blockchain Capital. “Some market participants are concerned the SEC will issue negative commentary coming out of a hearing on Monday.

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Yep that is playing a role as well. Though there seems to be confusion as to whether a meeting is even actually taking place today.

U mean a bunch of old farts who are hording a majority of the worlds fiat and dont want to lose that power lol

Bill Gates is doubly wrong here so I'd say more like Tiger Woods offering marriage counseling! Thanks for the update... looks like the mainstream media is working hard to slow down then next leg up for Bitcoin!

intangible superstition moving the real world...

We just need to wait a bit longer until the market will sky rock again

same shit, diff. week

Smoke scares out the rats, scared of being taken over? The fact that bitcoin makes these people even comment is proof of how big it is!

Warren Buffett did not understand the Internet and now he does not get Cryptos at all 🤣 Bill Gates also has no idea that you can actually short Bitcoin and that there is already Futures trading for Bitcoin for some time now.

They probably are bitcoin whales, you don't know whether they have invested or not.

Bitcoin was due a pullback already. I really don't know how much influence these fools have on the crypto market since Bitcoin was conceived as a way to opt out of the fraudulent crony capitalist system. These men are prime examples of crony capitalists.

They probably own Bitcoin already and just manipulate the price with their statements. Just my opinion. I'm too suspicious sometimes.

we need some time wait i belive market will rock...

The market had surged for a while and was due for a retraction. I wouldn't give these uninformed haters the credit for the drop! Don't worry, a day from now the surging will have returned.

bit coin should be legalise everywhere...

I don’t pay attention to these elite guys as they are so far away from reality given their wealth that they do not know what is truly needed for the majority of us that need to work for a living. Although I respect them for their contributions, they cannot be relied on as they cannot serve as a proxy to the majority of the coming generation that will support the potential of blockchain and its derivatives given the clear need for improved efficiency and transparency of financial markets.

I agree with the store of value proposition for Bitcoin. At least Buffet has some logic behind is reasoning, however Gold has reached critical mass, Bitcoin has not hence the opportunity.

As for Gates, I think there is something more nefarious going on. It wasn't too long ago he was in favour of cryptocurrencies, now all of a sudden he is sprouting this FUD? His statement is total BS, you mean to tell me one of the richest, well-connected men in the world doesn't have the resources to find a way to short Bitcoin within a few days? I very much doubt that. He could have easily just said he doesn't think bitcoin has any value but the fact he said he would short it was too maximise the fallout in my opinion.

I would never pay attention to what these men say, both have a lot of fame, but both one and the other, have made their fortune not exclusively for their talent, there is much under the table and behind the curtains, over them, which is out of our vision.

Look at this twitter of Musk directed to Buffet:

Sin título.png

I honestly believe Bill Gates and Warren Buffet own Bitcoin.

They're willing to sabotage the price just to keep others from making gains. Typical.

I'd take their words with grains of salt.

What's a great personality?
We have a lot to learn from such a person

Thank you for sharing this.

Actually, his words only reflect his fear of losing control of what they consider to be his property, which are the traditional businesses of the stock market that will be completely tokenized, and the technological market that will be completely absorbed by the BlockChain technology. On this last I recommend my last article. https://steemit.com/blockchain/@alfredolopez1980/de-la-tecnologia-de-la-informacion-internet-a-la-tecnologia-del-valor-blockchain

Don't forget that Buffett didn't invest i Apple until it was the biggest company on Earth. He missed that trade too. Stick to what you know old man Buffett.

Well have been seeing about the comment of Bill Gates in here for quite little time now. Well some will love that if he gets to do it ;)

As a matter of fact BTC closing to 10 k and the statement made by these people will sure have a positive affect I guess .

Bitquin is a really big coin
Its a great and great place
I expect her to succeed and rise in the future

Remember Buffett's famous saying? Buy when there's blood in the streets. He's spilling blood now, after he finally believes in the technology :D

I really respect this breakdown of cryptocurrencies, I have done a similar breakdown but from a slightly more humour based point of view, please feel free to read it, and laugh :-)

https://steemit.com/funny/@georgemason/the-number-1-reason-you-aren-t-getting-rich-from-bitcoin

Upvoted :-)

Just waiting for the news that they both bought the dip. 🙄