Buffett: "I Would Buy A Five-Year Put On Every Cryptocurrency"

Warren Buffett doubled down on his criticism of bitcoin Wednesday during an interview with CNBC, where he said he's almost certain the cryptocurrency craze "will end badly" and that the current runup in value will be fleeting.

But paradoxically, he also admitted that he "doesn't know anything" about digital currencies after saying he would eagerly buy five-year puts on "every one of the cryptocurrencies."

"In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending," said Buffett, the chairman and CEO of Berkshire Hathaway.

"When it happens or how or anything else I don't know," he added in an interview on CNBC's "Squawk Box" from Omaha, Nebraska.

"But I know this: If I could buy a five year put on every one of the cryptocurrencies, I’d be glad to do it but I would never short a dime’s worth."

While explaining why he wouldn't take a short position, he said he "gets into enough trouble with things I know something about..."

"I get into enough trouble with things I think I know something about," Buffett said. "Why in the world should I take a long or short position in something I don't know anything about."

His comments notably come a day after JP Morgan Chase & Co. CEO Jamie Dimon said he "regrets calling bitcoin a fraud." Dimon last fall famously compared bitcoin to the Dutch tulip mania and threatened to fire any JPM trader caught buying or trading digital currencies.

Buffett added that his remarks are purely hypothetical. "We'll never own a position in them," he said.

Still, Buffett admitting that he'd be a seller even though he "doesn't know anything about" bitcoin - he even claimed he wouldn't be able to explain bitcoin to a classroom of young students - should signal that readers should take his comments with a grain of salt.

After all, by his own admission, Buffett doesn't know what he's talking about.

Comments

Klassenfeind Ink Pusher Wed, 01/10/2018 - 09:28 Permalink

I hate to say it, but I completely agree with Buffett and I'll keep on buying pet rocks instead.

Call me a tin-foil hat idiot, but I have this feeling that all those crypto's only have one specific goal: to lure people away from gold. It's made to look like gold (the famous golden "B" coin logo whenever some crypto currency is mentioned) , the terminology resembles gold ("mining crypto's") and supposedly it has the same rarity and "store of value" as gold. The problem I have with crypto's is simple: it ain't gold, it's a technology that can and is being copied by thousands of other crypto's.

Look at Russia and China, they keep on buying gold hand over fist. Why?

https://www.rt.com/business/411700-russia-gold-reserves-putin/

In reply to by Ink Pusher

jcaz Buckaroo Banzai Wed, 01/10/2018 - 10:29 Permalink

A big deal about nothing-  all he's saying is that he'd buy some puts,  but he DID say that he'd never short it-  that should be enough for the bitcoin boys to service themselves for a week.....

Besides, this isn't how Buffett makes his money-  his biz is strong-arming deals and buying insurance scams-  he'd be the first one to admit his own advice on stocks and bitcoin shit doesn't mean anything.

In reply to by Buckaroo Banzai

Gaius Frakkin'… The_merovingian Wed, 01/10/2018 - 12:55 Permalink

How many corporate retailers are out there today? How many will be there in 5 years?

All corporate retailers are fucking scammers importing junk shit as middlemen from Chinese manufacturers who take payment in USD only because the USD is still the reserve currency... for now.

Buffet was dead wrong about retail just like his body will soon be. A relic from another time just waiting for God.

Cryptocurrencies are creating the economy of the future for local retailers who actually make stuff in America.

In reply to by The_merovingian

mtl4 52821740 Wed, 01/10/2018 - 11:54 Permalink

Most billionaires lie and Buffett is certainly no exception.........claimed he never invests in commodities because he knows nothing about it (sound familiar), yet tried to pump billions in silver in during the mid 1990's.  That humble folksy grandpa routine is just like the old mafia dons who ran around looking like Robin Hood while running criminal enterprises on the side.  Best advice is to bet exactly the opposite of whatever advice a billionaire decides to dish out in public.  

In reply to by 52821740

Blankenstein 52821740 Wed, 01/10/2018 - 12:43 Permalink

Modest and self deprecating.....  please

Just like when he was going on and on about derivatives, going as far as calling them Financial Weapons of Mass destruction.  

“We have more money than ideas…one place the money certainly won’t go is to derivatives. There’s no place with as much potential for phony numbers as derivatives.”

 

Then golly gee we find out a few years later that Berkshire has been in derivatives.  When confronted Buffet puts on the old down-to-earth grandpa act, "well ah shucks"  

In reply to by 52821740

Economics Considered rrrr Wed, 01/10/2018 - 14:33 Permalink

It can be an awfully impactful thing to completely understand that exactly what people say rather than a paraphrase may well not really be semantically the same at all - and also grasping what wasn't said can be awfully important at.  

In particular, not 'knowing' how cryptos 'work' is critically and ... Vastly ... Different than shrewdly understanding what they 'are' in terms of financial instruments.  And also in particular, saying a PUT could be a significant payoff says that he full well shrewdly knows what cryptos 'are' - in terms them being a 'priced' instrument rather than having ANY asset value - and cryptos vis-a-vis scam.fraud.bubble.ponzi.

You paraphrased (very different than what he said)

 (He did say that he doesn't know anything about it.)

Versus:

But paradoxically, he also admitted that he "doesn't know anything" about digital currencies after saying he would eagerly buy five-year puts on "every one of the cryptocurrencies."

"In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending," 

"When it happens or how or anything else I don't know,"

/cheers. /E.C.

 

In reply to by rrrr

Scuba Steve Gaius Frakkin'… Wed, 01/10/2018 - 10:07 Permalink

"Berkshire Hathaway will be nothing without him"

Totally agree.

Caveat: I'd bet a lot of silver bullion that Buffett has a death trigger for the company to be sold to an insider ... Gates, Paulsen, or big Bank ... immediately upon his death. (Because Munger would probably die the same/next day) 

 

BTW, does this mean McAfee will be eating his dick or not?  Where is the "Put" sentiment on this trade?

In reply to by Gaius Frakkin'…

marysimmons Scuba Steve Wed, 01/10/2018 - 10:33 Permalink

People like Mr Buffet, Mr Dimon, and other dinosaurs of the central bank and fiat financial world just cannot wrap their heads around the idea of a decentralized payment system and they can't grasp the idea of decentralized everything.  Its like trying to get an octogenarian to understand the value of World Wide Web back in the late 80's - just something they cannot comprehend because its not what they're used to.

 

Buying 5 year puts on BTC, or Ethereum when they become available, would be like buying 5 year puts on Berkshire Hathaway 5 years ago - the only value would be to protect a large long position.

In reply to by Scuba Steve

aurum4040 marysimmons Wed, 01/10/2018 - 11:11 Permalink

Exactly. The blockchain is arguably  greatest technological development in 100 years. Its Web 3.0. People who do not understand data to systems integration dont get it. They dont understand the value of it...Pro Tip on media metadata integration - POE coin....From the man who told everyone here to buy Ethereum in the $20s, Monero in the $30s, Ripple at .10. Ignore if you are so inclined. Listen if you want to LEARN. 

In reply to by marysimmons

Entertaining1 Archive_file Wed, 01/10/2018 - 17:31 Permalink

Since you use comments to pump your coin, I am curious.  When you are asked direct questions about Railblocks (such as comparisons to Iota), you say you will respond back to us.  You never actually do.  Why is that?  Do you even own this crap or is this the Confessions of a Crypto Operator for the new century?  

No response is necessary.  If you stop posting we will just assume you got in touch with old tech like Livermore, who ate a bullet.  

 

In reply to by Archive_file

freak of nature Scuba Steve Wed, 01/10/2018 - 10:36 Permalink

Its not binary Mr Buffet. It will come to a horrible "end", but that will be more the beginning of their run up than anything else.

I sometimes wonder if exchange regulations will actually be the catalyst for the inevitable banking collapse. Once those regs are in place, suddenly cryptos are legitimate. Whats to stop people from bringing in savings (aka hording these days) and put them into cryptos? Already under capitalised banks suddenly experience a run, because the average saver isn't content with their 1 to 4% p.a. when they see cryptos rising anywhere from 5% to 400+% per day.

Full disclosure: While I'm dabbling in them myself, I do believe they'll become the most totalitarian instrument the world has ever seen.

In reply to by Scuba Steve

freak of nature TuPhat Thu, 01/11/2018 - 03:51 Permalink

Completely agree. But most still equate the entire space to a currency market, but it is quite a bit different these days. It's more like a new stock market with incredibly low barriers of entry.

My guess is eventually nation states will start shifting currency to a similar platform so they are then a part of the ecosystem. Crypto space will rapidly transform, as it is right now, to more of a stock based investment platform that also contains other aspects like global id, health records, licenses etc.

In reply to by TuPhat