Bitcoin Surges 25% In One Week. Warren Buffett Still Won't Buy It
Last Sunday we reported Bitcoin's price had surged 50% in the previous month. In the week since it's surged another 24.8%. As Bitcoin celebrates its 12th anniversary, a Forbes columnist writes that Bitcoin "soared to $34,000 yesterday — but here's why Warren Buffett will never own Bitcoin." Buffett has called Bitcoin, among other names, "rat poison squared" and has said he won't ever buy the cryptocurrency. "I don't have any cryptocurrency and I never will," Buffett told CNBC in February, when Bitcoin was trading at about $10,000. Here are 3 reasons why Buffett will never own Bitcoin, no matter how high the price of Bitcoin soars: Buffett believes that Bitcoin has no underlying value. As a value investor, Buffett invests in companies that are undervalued, produce stable and recurring cash flow and have the ability to increase in book value. To Buffett, Bitcoin doesn't produce earnings or dividends. Rather, the value of Bitcoin is simply what one person is willing to pay for it. In this regard, Bitcoin is no different than the tulip craze of 1637. Therefore, Buffett believes that Bitcoin has no inherent value... While all investing involves some degree of speculation, Buffett's background is in insurance and risk mitigation. Buffett doesn't invest in "high fliers" — that's not his game. His game is "buy and hold" — forever. He invests in companies that grow over time, steadily and consistently. And the third reason? Warren Buffett "only invests in things he understands." "He prefers to invest in stable consumer goods companies like Coca-Cola and financial services companies like American Express."
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