Billionaire investor Warren Buffett was way ahead of a loud and growing chorus of bitcoin haters, and began questioning its viability five years ago.
The Berkshire Hathaway CEO made headlines this year for calling bitcoin “rat poison squared” but he first took on the digital currency at the company’s 2013 annual shareholder meeting, according to a review of CNBC archives.
“Of our $49 billion, we haven’t moved any to bitcoin,” Buffett said at the time, when the digital currency was trading near $130.
Berkshire Hathaway Vice Chairman Charlie Munger, Buffett’s long-time business partner, had kicked off the discussion that Saturday saying he had “no confidence whatsoever” in bitcoin becoming a universal currency. Buffett agreed, saying that was his “gut reaction.”
Buffett, whose net-worth is more than $80 billion, stepped up his criticism a year later and said it was neither a durable means of exchange nor a store of value.
“I would not be surprised if it’s not around in 10 or 20 years,” Buffett told CNBC at the 2014 annual shareholder meeting. “It’s not a currency, it does not meet the test of a currency.”
He called bitcoin a speculative kind of “Buck Rogers” phenomenon, and said people buy and sell them thinking they’ll go up or down, “just like they did with tulip bulbs.”
Buffett and Munger have invested in everything from Coca-Cola to Heinz ketchup to IBM computers to Dairy Queen and Duracell. The two have also backed insurance companies, media companies, railroads and real estate.
Days after the 2014 shareholder meeting, Buffett appeared on Squawk Box, and called bitcoin a “mirage.”
“Stay away from it, it’s a mirage basically,” he said. “The idea that it has some huge intrinsic value is just a joke in my view.”
Buffett joins business leaders Jamie Dimon and Bill Gates, economists Nouriel Roubini and Robert Shiller, and the fund managers Ray Dalio and Howard Marks among those who have questioned its legitimacy.
Four years after Buffett’s first public comments, bitcoin rallied to nearly $20,000 and gained more than 1,300 percent in 2017. Weeks after it hit its high, Buffett said he was still staying away.
“In terms of cryptocurrencies I can say almost with certainty they will come to a bad ending,” Buffett said. “When it happens or how I don’t know.”
Since Buffett first addressed bitcoin, its price has jumped more than 4,000 percent.