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  • By The Financial District

Buffett Predicted Bitcoin Would Crash, And It Did

Warren Buffett predicted in 2018 that Bitcoin will crash and “will come to a bad ending,” on the Oracle of Omaha’s ominous warning has come to fruition as Bitcoin’s value surged to $69,000 and later plummeted more than 70%, Ethan Rotberg wrote for MoneyWise.

Photo Insert: Buffett simply wouldn't go near cryptocurrency.

Buffett issued the warning during an interview with CNBC, fortifying his position as one of the world’s foremost critics of Bitcoin and its gaggle of cryptocurrency. Indeed, after reaching $69,000 per unit on November 10, 2021, Bitcoin sputtered and erased 75% of its value, settling at $16,600 as of the end of the trading day on Dec. 19.

Holdout investors who once thought they’d missed an opportunity of a lifetime are now sighing with relief while those who bought in at the peak are trying not to think about their losses.

“If you ... owned all of the bitcoin in the world and you offered it to me for $25, I wouldn’t take it,” Buffett told CNBC earlier this year. Other than Bitcoin's disappointing track record, here are three more reasons Buffett won’t go near it, Rotberg argued.

First, Buffett sees no unique value at all in Bitcoin. It is an unproductive asset, if it were an asset at all. Second, he doesn’t think crypto counts as money. “I don't have any Bitcoin. I don't own any cryptocurrency, I never will,” he told CNBC back in 2020.

All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

Money is supposed to be a means of exchange, a store of value, and a unit of account. For Buffett, it is a mirage. “It does not meet the test of a currency,” the billionaire said on CNBC in 2014. “It is not a durable means of exchange, it's not a store of value.”

Lastly, Rotberg says Buffett is allergic to Bitcoin because “he doesn’t understand it.” Buffett became one of the most successful investors in history by sticking with stocks he understands.

Market & economy: Market economist in suit and tie reading reports and analysing charts in the office located in the financial district.

"I get in enough trouble with things I think I know something about. Why in the world should I take a long or short position in something I don't know anything about?” But people like to gamble, he told CNBC after a 2018 Berkshire Hathaway annual meeting, which is another problem with nonproductive assets.

“If you don’t understand it, you get much more excited than if you understand it. You can have anything you want to imagine if you just look at something and say, ‘that’s magic.’”

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