Digital currencies are a new sensation in the financial markets. They have attracted opinions of the rookies, experienced and highly learned financial experts. No one seems to know clearly the direction cryptocurrencies. However, there are those very pessimistic about the future of the cryptocurrencies which have come to be associated with the main digital currency- bitcoin.
One person who does not believe in bitcoin is billionaire and founder of Berkshire Hathaway Inc., Warren Buffet. Buffet believes bitcoin is a bubble that will soon come to an end.
Bitcoin and other digital currencies are known for being virtual currencies. Compared to other modes of transactions, digital currencies are considered non-existence; no one can tell what they are. Warren Buffet’s Bitcoin opinion is that it is a non-value producing currency. He believes that if something is not involved in any activity of creating value, then it is doomed to fail. This fate befalls Bitcoin. Warren Buffet sees cryptocurrencies as having no tangible value. They do not generate any income or even pay dividends.
He adds that there is no way to determine their value. Whatever is happening right now is just people gambling with its value. Bitcoin and other cryptocurrencies are just a speculation that investors are making. Few people know how they work or even how their value is determined.
Warren Buffet reveals the mind-boggling issue that many investors are ignoring. They do not understand what bitcoin is. The currencies lack transparency and therefore not worth the investment right now. Lack of any kind of regulation on the cryptocurrencies has turned Warren Buffet away. He believes they will finally implode and cause serious losses.
Until such a time when bitcoin and other digital currencies will be controlled or their information will be available to everyone, Warren Buffet is staying out of any investment.