Date
21 July 2018
Bitcoin and other cryptocurrencies are headed for trouble, according to Warren Buffett. Photo: Reuters
Bitcoin and other cryptocurrencies are headed for trouble, according to Warren Buffett. Photo: Reuters

Cryptocurrencies ‘will come to a bad end’, says Buffett

Legendary investor Warren Buffett said on Wednesday that he will never invest in cryptocurrencies, and suggested that units such as bitcoin are destined for a crash once the current mania ends.

“I can say almost with certainty that cryptocurrencies will come to a bad end,” Buffett, the billionaire chairman of investment firm Berkshire Hathaway, told CNBC in an interview, Reuters reports.

“We’ll never have a position in them,” the investment guru said, warning that virtual currencies are headed for trouble.

Buffett’s comments were backed by Charlie Munger, a longtime partner at Berkshire, who described the soaring values of citcoin and the other cryptocurrencies as “bubbles”.

According to The Guardian newspaper, Munger told an audience at the University of Michigan that investors “are excited because things are going up at the moment and it sounds vaguely modern. But I’m not excited.”

“I think it is perfectly asinine to even pause to think about them. It’s bad people, crazy bubble, bad idea, luring people into the concept of easy wealth without much insight or work,” Munger was quoted as saying.

Bitcoin surged more than ten-fold last year, surging to a high of more than US$19,000, but has since slipped back.

Currently, it is trading at around US$14,700.

In other news, Chinese bitcoin mining giant Bitmain Technologies said it is expanding to Switzerland, after registering a subsidiary in that country.

“Bitmain Switzerland will play a central role during our global expansion,” a spokesman for the Beijing-based group told Swiss paper Handelszeitung, Reuters reports. 

Founded in Beijing in 2013, Bitmain is a leading bitcoin miner which also makes chips and computer hardware for mining.

China is one of the world’s biggest sources of bitcoin mining, where miners solve complex mathematical puzzles with computers in order to be awarded virtual coins.

But a government clampdown on electricity-intensive cryptocurrency mining could soon see that activity move elsewhere.

Zug, a small canton in the middle of Switzerland, has become known as the Swiss “Crypto Valley” due to the proliferation of cryptocurrency groups setting up shop there, Reuters notes.

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RC

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