Buffett and Gates are becoming frightened of Bitcoin. Tell people to stay away.

[dozu888]

So, the Fed and its 2% inflation target is a good thing huh? My first new car I bought (1971 Ford) cost me $2,000, now what will 2K buy me. So, give me BTC any day for a long term parking of funds. If, when, we get a world wide systemic economic collapse, then the "absurdity of BTC" won't be so absurd.

the discussion around inflation/deflation itself can last forever... but in a nutshell, a 2% inflation target is Fed's safety margin to avoid a deflation spiral.

Japan has shown us what a spiral looks like. The price falls, people hoard money, people hoard money and price falls more.... vicious cycle.

For the everyday economy, such as your car example, a mild inflation is not an issue.... yes 2k today won't buy what it used to buy 20 years ago, but you are not earning what you would 20 years ago either.. inflation encourages investment and risk taking.

You gotta think for yourself for a minute on this one .... it's too easy for the bitcoin/gold/silver pushers to go poopoo on the idea that the Fed is printing the dollar into worthlessness, but in the meantime the central bank was created for the exact reason that stuff like btc/gold/silver can't possibly handle the modern commerce.... imagine if we were on gold standard in 2008... we could actually not find bread on the supermarket shelf.

 

[dozu888]

So, the Fed and its 2% inflation target is a good thing huh? My first new car I bought (1971 Ford) cost me $2,000, now what will 2K buy me. So, give me BTC any day for a long term parking of funds. If, when, we get a world wide systemic economic collapse, then the "absurdity of BTC" won't be so absurd.

also, from the investment standpoint, Warren did hit the nail on the head here.

Gold/silver appreciation, long term, has been inline with inflation.... they are indeed non-producing assets. Stocks/bonds, over the long term, has been proven to outperform significantly ABOVE INFLATION.. Especially stocks are natural hedges as companies can raise price.... so in your car example, you own partially the car company, and the inflation works IN FAVOR for you.

Bitcoin, it may become the digital gold, but nothing more than that... for the stated reason it can never become a world currency. However at this stage the product is very poor, considering it's implementation and user penetration... it's market cap is bigger than NFLX, which is responsible for about 1/3 of all the global internet traffic... think about that... what is more valuable, something with virtually zero user adoption, vs 1/3 of internet traffic.

Also... gold is not replaceable. bitcoin can be replaced by any alt-coins.. again think penetration. if the big techs decide tomorrow they will issue Alphacoin or AmaCoin or MicroCoin or FaceCoin or FlixCoin.... imagine the immediate worldwide penetration and immediate death of bitcoin.

Step back and think for yourself for a minute. Bitcoin is rat poison... there is no better word to describe it.

 

[carrer]

Cryptocurrency will not die, it will evolve and become better day by day. Adoption is increasing everyday especially in Asian countries.

 

[ironchef]

"Tell people to stay away"? Why? Because they said so?

That doesn't make any sense. They got rich by doing they're own thing, not by giving away advice/opinions to people. And even they admit they were wrong several times in their lives. So instead of being a mindless zombie following advice from gurus... I prefer to think for myself and draw my own conclusions.

Yes, and this time it is different.

 

[Illini Trader]

also, from the investment standpoint, Warren did hit the nail on the head here.

Gold/silver appreciation, long term, has been inline with inflation.... they are indeed non-producing assets. Stocks/bonds, over the long term, has been proven to outperform significantly ABOVE INFLATION.. Especially stocks are natural hedges as companies can raise price.... so in your car example, you own partially the car company, and the inflation works IN FAVOR for you.

Bitcoin, it may become the digital gold, but nothing more than that... for the stated reason it can never become a world currency. However at this stage the product is very poor, considering it's implementation and user penetration... it's market cap is bigger than NFLX, which is responsible for about 1/3 of all the global internet traffic... think about that... what is more valuable, something with virtually zero user adoption, vs 1/3 of internet traffic.

Also... gold is not replaceable. bitcoin can be replaced by any alt-coins.. again think penetration. if the big techs decide tomorrow they will issue Alphacoin or AmaCoin or MicroCoin or FaceCoin or FlixCoin.... imagine the immediate worldwide penetration and immediate death of bitcoin.

Step back and think for yourself for a minute. Bitcoin is rat poison... there is no better word to describe it.

You say BTC might become digital gold then you say the best way to describe it is "rat poison". There is quite a range in between your two opinions. The pros and cons of BTC have been well argued in other threads but from my point of view there is comfort in having a non-correlated asset like BTC for a long term hold. It has a limited supply and it is not subject to any valuation model like PE ratios, etc. We all do not see it that way and that is fine.

Bring on all the "FaceCoins" you want but it will not mean the immediate death of Bitcoin. Bitcoin is here to stay and it will be very interesting to watch its valuation over the coming years.

 

[dozu888]

You say BTC might become digital gold then you say the best way to describe it is "rat poison". There is quite a range in between your two opinions. The pros and cons of BTC have been well argued in other threads but from my point of view there is comfort in having a non-correlated asset like BTC for a long term hold. It has a limited supply and it is not subject to any valuation model like PE ratios, etc. We all do not see it that way and that is fine.

Bring on all the "FaceCoins" you want but it will not mean the immediate death of Bitcoin. Bitcoin is here to stay and it will be very interesting to watch its valuation over the coming years.

Slightly taken out of context, as I did say the current product is very poor and lacking penetration and can be replace by alt coins or FaceCoins etc.

Anyway - seeking comfort in non-correlated assets is fair, if it suits your risk appetite.

However, I want to caution people on this... comfortable trades are USUALLY bad trades.

Look at the retail sentiment - https://www.dailyfx.com/sentiment.

You can't see gold on weekends... but check on Monday you will see retails are 4:1 long:short on this, while 3:1 on bitcoins..... retails who usually are NOT in the know and are at the mercy of brainwashing by the big guys.... the house is SHORT on both.

if you are not familiar with these sentiment indicators, let me tell you for the majority of 2016-2017, the SP500 was 1:9 long/short, and we all know what happened to stocks in those 2 years.

Retails are dumb money, and usually a reliable contrarian indicator.

 

[NeedToLearn]

Agreed, PM would soar as well but BTC has advantages of storability, transferablity, divisibility, and a known total supply. And it also is recognized and accepted in all countries. (except in the nation of ET )

Also, I do keep wondering why Buffet feels the need to bad mouth BTC and ole Charlie side kick is even worse. Why doesn't he just keep doing his thing, buying Pepsi because it tastes good and he can understand it. He doesn't bad mouth tech stocks, he just says he does not buy them because he can't understand them.

But yet the guy who does not know a blockchain from a chain link fence is telling everyone that BTC will cause instant death if one dares to touch it.

Back during the internet bubble, he (Buffett) didn't like them. He said he didn't understand tech for a long time but now he is buying them, probably meaning after all these years he learned about them and felt comfortable to invest. Same goes with foreign stocks.

I can only guess that he has a decent understanding about these coins to have a strong opinon. Maybe he is just old and doesn't accept change easily, but maybe his old age allows him to spot a bubble he has seen over and over. Who the hell knows.

 

[johnarb]

Buffett is very very smart (dare I say a genius) and calculating when it comes to investments. He did not invest in Tech companies during the Nasdaq bubble as they were in hyper-growth and priced in PEG terms. He likes insurance companies, banking, and stable dividend companies like Coke.

He's investing in Apple now because it fits his style. Lots of cash (hundreds of Billion$), a consumer market that is borderline addicted to the product (think KO) and Apple pays out dividends.

Buffett and Munger may not be tech-savvy, but they know money and banking. Berkshire has about $67B invested in banking stocks. They are also very old and even if they work hard at it, they cannot spend enough of the yearly income they receive from their investments.

Imo, they understand bitcoin very well. Yes, bitcoin is a threat to their investments in banking stocks and it is not something they can control and manipulate along with their powerful friends as it's decentralized, but read previous paragraph and you'll see that I don't think that's the reason they hate it.

Ponzi, tulip, rat-poison squared, turd, harvested baby brains - these are hateful words that people with such riches and status should not be using on an insignificant asset. Why do they even take the time to discuss bitcoin as the short time they have left in this world is so valuable? My answer is: Peer-pressure

Yes, unbeknownst to most people they are humans and have human emotions. They may very well be out of .1 percent of the world population's league, but they have people they consider to be their equal, or even people they consider to be better than them. And whaddyaknow... there is a huge demand in that circle for bitcoin.

Sources:

https://www.fool.com/investing/2017/09/28/why-warren-buffett-loves-bank-stocks.aspx

https://twitter.com/x/status/993969955300368387

 

[NeoTrader]

Yes, and this time it is different.

Whatever that means... Right back at ya..

 

[Humpy]

The cryptos are sorting out the fools from the astute. In hindsight it will look obvious but right now it could go either way.