Warren Buffet – one of the world’s most seasoned businessman hailed for his legendary investments and shrewd intellect – has dismissed the value of bitcoin claiming that it is in a ‘bubble territory’ at best. “You can’t value Bitcoin because it’s not a value producing asset.”
The current value of bitcoin as it stands, however, is more than $5700 and it is expected to continue to push past new milestones. It did briefly touch $6100 on Oct 20 but promptly fell down to a lower value within a few days.
Throughout its first few years, Warren Buffet has always shown skepticism towards bitcoin and said on CNBC in 2014, “Stay away from it. It’s a mirage basically.” Since then, the value of the cryptocurrency has gone up by sevenfold, especially after Japan recognized the legal status of bitcoin exchanges.
So the best bet for cryptocurrency’s continued growth is increasing state regulation to make it an attractive investment for investors.
Voicing the same opinion was billionaire investor Howard Marks, who advises his clients to stay away from digital currencies. “In my view, digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it.”
He went on to compare bitcoins to the South Sea bubble of 1720 and the internet bubble of 1999. However, the opinions of people like Warren Buffet and Howard Marks have consistently been proven to be wrong in the long run. As of now, there is no holding back the investors.
Prince Al Waleed bin Talal of Saudi Arabia doesn’t hold bitcoin in high regard either, “It doesn’t make sense. This thing is not regulated. It’s not under control. It’s not under the supervision of any federal –elect… I think it’s going to implode.”
The implosion has yet to occur, and bitcoin only continues to surge in value. While it is obvious that investors and financial pundits are divided over the legitimacy of bitcoin, those who had the foresight to mine bitcoins in its early stages are definitely laughing their way to the bank. If you had purchased $100 worth of bitcoins in 2011, you would definitely be worth more than $100 million today.
So what exactly has contributed to the phenomenal success of bitcoin? Ever since the Japanese government embraced bitcoins in April 1, 2017 the value of the digital currency has risen by over $1 billion.
China, unlike Japan, does not appreciate the use of bitcoins very much. This is because of the relative ease with which it allows wealthy individuals to transfer their money across the border without incurring any taxes. China’s attempts to keep this outflow of wealth in check meant that it was on a trajectory to ban bitcoin and all cryptocurrency trades in the country.
Beijing had ordered bitcoin exchanges to shut down. Due to this, many major outlets complied with their demand including BTCChina and OKCoin. The value of bitcoin felt some setback but immediately recovered – showing that it is here to stay.