Bitcoin pulls back from $10K; Buffett, Munger, and Gates hammer away

Alfred Osborne
May 12, 2018

Warren Buffett said Monday in an interview with FOX Business' Liz Claman that Wells Fargo has a great future as the bank launched a new brand campaign to fix its image in the wake of a fake account scandal.

The aforementioned CNN Money article reported that some cryptocurrency experts should not pay attention to the criticisms of Munger and Buffett. deVere Group CEO Nigel Green said in a report that he is perplexed about the two men not seeing "the intrinsic value of some form of cryptocurrency".

Warren Buffett, the billionaire investor whose opinion can send shockwaves through a stock, just dragged bitcoin buyers through the mud on Monday (May 7) by referring to the commodity as "rat poison squared".

"It's kind of a pure "greater fool theory" type of investment", Gates added, also chipping in that he'd bet against the currency if he could.

At the same meeting Charlie Munger, Buffett's vice chairman and long-time confidante, was even less favorable.

"If you look at Apple, I think it earns nearly twice as much as the second most-profitable company in the United States", Buffett told the cable network, calling it an "unbelievable company".

Earlier this year, during a CNBC interview, he predicted that this cryptocurrency craze and all the excitement driving people to invest in them is irrational and "will come to a bad ending" once the excitement wears off.

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Likening bitcoin demand to the tulip bulb mania in 17th century Holland, Buffett, the Chairman and Chief Executive of Berkshire Hathaway Inc, said the mystique behind the cryptocurrency has caused its price to surge.

Cryptocurrencies have generally performed well over the past few weeks, so it's possible that the market is just taking a breather.

Despite standing very bearish against cryptos or bitcoin, he continued that the technology behind the coins - blockchain does bring up some value.

During the meeting itself, Buffett compared cryptocurrencies to gold, explaining that "if you had bought gold at the time of Christ and you figure the compound rate on it, it's a couple tenths of a percent".

The comments from Bill Gates are particularly surprising because he is so tech savvy, so we would expect him to see being fairly accepting of the big trends. For example, Buffett has acknowledged that he regrets not getting in on Amazon years ago. Bill Gates, who is also on Berkshire's board, was also offered the opportunity to weigh in on cryptocurrency, albeit in less imaginative terms.

"Basically you have to make an investment decision for your life", Buffett said. The Motley Fool owns shares of and recommends Amazon and Berkshire Hathaway (B shares), and has no position in any cryptocurrencies mentioned.

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