Bitcoin, the main digital asset, reached its maximum value in November 2021 when it was close to $70,000, since then it has accumulated losses of almost 70%. At that time, ‘crypto’ was attractive to investors, as a way to acquire large profits.
(Hackers steal $100 million in Horizon cryptocurrencies.)
Nevertheless, warren buffett, renowned American investor, was never interested in the business of this digital asset, whose capitalization is already below a trillion dollars.
Why does Buffet never invest in cryptocurrencies? Next, We tell you the three main reasons, according to the MoneyWise app report.
(The volatility of the new markets).
First, the value of bitcoin is unproductive, that is, it comes from optimism, from hoping that someone is willing to pay more in the future than they are paying today. For Buffet, “it has no unique value.”
Another reason is that it is not a durable medium of exchange. Therefore, for the investor, cryptocurrencies are not money, “they do not pass the test of a currency”, but for now they are only a tradable asset.
The last reason is that Buffet invest in what you understand how it works and how it makes money. In this case, he acknowledges that he does not understand the cryptocurrency model and therefore prefers to proceed with caution. “If you don’t get it, you get a lot more excited than if you do. You just look at something and say, ‘That’s magic,'” she said.