“A perfect sucker game.” How famous entrepreneurs criticize cryptocurrencies

Since the advent of cryptocurrencies in 2009, digital assets have regularly faced criticism from representatives of the traditional financial system. In particular, Warren Buffett, owner of Berkshire Hathaway and one of the most successful investors on the planet, has repeatedly spoken about his negative attitude toward cryptocurrencies. Let's take a closer look at some of the entrepreneur's statements about cryptocurrencies.

• October 2017. The entrepreneur called bitcoin (BTC) a “bubble.” In his opinion, it is impossible to evaluate the coin because the cryptocurrency is not an asset that produces value.
• January 2018. The head of Berkshire Hathaway predicted a bad ending for cryptocurrencies. At the same time, the investor stated that he was used to working with assets that he knew at least something about. Thus, Warren Buffett confirmed the speculation of members of the cryptocurrency community that he did not try to study the mechanisms of the new financial instrument.
• April 2018. The businessman compared investing in cryptocurrency to gambling.

“You aren’t investing when you do that [buy cryptocurrency]. You’re speculating. There’s nothing wrong with it,” Warren Buffett noted, adding that buying cryptocurrency, in his opinion, is gambling, not investing.

• May 2018. Buffett called bitcoin “rat poison squared.”
• February 2019. The investor called BTC “a delusion with no unique value.” At the same time, the entrepreneur told reporters that he considers the blockchain technology, which is the basis of the cryptocurrency, “very important.”

Interesting! In January 2020, Justin Sun, CEO of the TRON Foundation crypto project, tried to change Warren Buffett's attitude towards cryptocurrencies. During a charity dinner with the head of Berkshire Hathaway, for which the young man paid $4,5 million, he told the businessman about the benefits and opportunities of digital assets, and gave him a bitcoin.

In the middle are Warren Buffett and Justin Sun.

Source: Justin Sun's microblog

Justin Sun's attempts to lure Warren Buffett to the side of the crypto community were unsuccessful. Already in February 2020, the head of Berkshire Hathaway returned to criticizing cryptocurrencies. This time, the businessman reiterated that digital assets have no value. The businessman explained his point of view by the fact that cryptocurrencies do not produce anything.

As of the time of writing, the critic has not conducted a single transaction with the bitcoin given to him by Justin Sahn.

The negative attitude toward BTC did not stop the Berkshire Hathaway investment holding company from investing $500 million in a cryptocurrency-friendly digital bank, Nubank, in the summer of 2021. In February 2022, the holding company invested another $1 billion in Nubank.

• May 2022. The billionaire once again questioned the value of bitcoin. Buffett stated that he is not willing to buy all of BTC even for $25.

By 2022, members of the cryptocurrency community began to humor Buffett's criticism of bitcoin. For example, the head of electric car manufacturer Tesla, Ilon Musk, was amused by the billionaire's fixation on BTC in his speech.

It turns out that Warren Buffett actively criticizes bitcoin, while not being shy about openly stating that he doesn't understand how the new financial instrument works.

Who else is against cryptocurrencies

Warren Buffett’s negative attitude towards cryptocurrencies is shared by many famous people. Here’s what the billionaire's “neighbors” in the financial market say about digital assets.

Charles Munger

Charles Munger, the vice chairman of Berkshire Hathaway and an associate of Warren Buffett, also often criticizes cryptocurrencies. For example, in December 2021, he approved restrictions on transactions with digital assets in China. Munger, however, believes that the US should follow China's path when it comes to regulating the cryptocurrency market.

"I would never buy cryptocurrency. I wish they [digital assets] hadn't been invented at all," Warren Buffett's associate noted.

In February 2022, Munger, during an interview for Yahoo Finance, compared cryptocurrencies to a “venereal disease.” The businessman explained his negative attitude to digital assets by the fact that virtual coins are often used in illegal activities.

Interesting! In April 2022, the CEO of Binance, one of the largest cryptocurrency exchanges, Changpen Zhao said that cryptocurrencies, contrary to common belief, are not the most effective tool for conducting illegal transactions. The expert explained his point of view by the fact that regulators and law enforcement agencies have services that allow them to track such transactions.

It is worth recalling that the system records information about transactions with cryptocurrencies such as bitcoin in the blockchain. Through the identification of a cryptocurrency wallet, you can get information about all the transactions of the user. Tracking cash transactions in a similar way is not so easy. At the same time, critics of cryptocurrencies prefer to keep silent about the share of fiat in fraudulent transactions.

Nassim Taleb

Nassim Taleb, the renowned financier and author of the economic bestseller “The Black Swan: The Impact of the Highly Improbable” considers bitcoin “a perfect sucker game during low interest rates.” In his opinion, the cryptocurrency can only be of interest for speculative purposes. Most supporters of BTC, he believes, are “total idiots.”

Despite the active criticism of bitcoin, Nassim Taleb admitted that the coin may be useful. The financier noted that the cryptocurrency cannot be controlled. This, in his opinion, is the “most potent case” for BTC. The writer pointed out how in some countries, including Lebanon, local people use cryptocurrency. The coin helps people conduct transactions outside of the financial market, which has fallen under the control of authorities that have lost the trust of citizens.

Peter Schiff

Peter Schiff, Euro Pacific Capital Inc. President and gold supporter, considers bitcoin the biggest bubble in the history of the financial market. In his opinion, the crypto-industry will implode. Instead of bitcoin and other cryptocurrencies the businessman urges market participants to invest in traditional saving asset with a long history, that is, gold.

Interesting! Peter Schiff's son Spencer Schiff does not share his father's negative attitude to cryptocurrency. In March 2021, the young man transferred 100% of his investment portfolio into bitcoin. According to Peter Schiff, his son invested in BTC because he was “brainwashed.”

Jamie Dimon

Jamie Dimon, head of the US financial conglomerate JPMorgan considers bitcoin worthless. The banker calls those who buy BTC stupid. At the same time Jamie Dimon admits that his opinion is not popular.

“I personally think that Bitcoin is worthless. Our clients are adults, they disagree [with my opinion]. That’s what makes markets, so if they [JPMorgan clients] want to have access to buy yourself Bitcoin, we can’t custody it but we can give them legitimate, as-clean-as-possible access.”

Criticism of cryptocurrency by the head of the financial conglomerate did not prevent the company from launching a bitcoin fund for wealthy clients in August 2021.

Interesting! In April 2022, Jamie Dimon recognized the value of blockchain and decentralized finance (DeFi) segment applications.

Larry Fink

Larry Fink, CEO of the asset management company BlackRock, doubts the value of bitcoin. He shares Jamie Dimon's opinion that BTC is worthless. The banker is confident that bitcoin will not be a full-fledged substitute for traditional money. However, the head of the financial institution does not exclude that digital assets may become a popular tool for settlements in international trade.

Despite Larry Fink's criticism of cryptocurrencies, BlackRock is investing in digital assets. For example, in April 2021, the US Securities and Exchange Commission (SEC) published a report stating that the company invested $8,7 trillion in bitcoin futures. In February 2022, BlackRock provided customers with the ability to trade cryptocurrency, and, in April, it announced the creation of an ETF based on cryptocurrencies.

Donald Trump

Former US President Donald Trump considers bitcoin a fraud. To deal with the potential threat, the politician called on American authorities to tighten the regulation of cryptocurrency in the country. He also supported a ban on cryptocurrencies in China.

According to Trump, bitcoin is a competitor to the US dollar. The politician considers it unacceptable to have such a rival for America's national currency, which, the former president believes, should become a “world currency.”

Interesting! Former US presidential national security adviser John Bolton claims that Donald Trump tried to “go after bitcoin” during his presidential term. It is likely that the former head of America does not fully understand how BTC works. Among other things, the politician should familiarize himself with the peculiarities of bitcoin's decentralized system, which implies the abandonment of a single center of control. In order to “defeat” BTC, Trump would have to find all the network nodes of the cryptocurrency and block them, which is impossible to do in practice.

Apparently, Donald Trump's negative attitude toward digital assets does not apply to non-fungible tokens (NFTs). In December 2021, former US first lady Melania Trump launched an NFT marketplace and released her own collection of tokens. The wife of America's former president promised to donate a portion of the proceeds from the sale of the assets to charity. Donald Trump congratulated his wife on the launch. Later, in February 2022, the former US president joined his wife's initiative by announcing the release of his own NFT collection.

Instead of a conclusion

Many critics, including Warren Buffett, do not fully understand how cryptocurrencies work. At the same time, ignorance of the “subject” does not prevent them from expressing a negative opinion about the new tool.

Despite the negative attitude to digital assets, representatives of the traditional financial market prefer to separate their personal opinion and business. Therefore, the companies of many active critics of cryptocurrencies work with virtual assets in one way or another.