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The One Thing People Should Understand Before Owning Bitcoin as an Investment - Alldamoney

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The One Thing People Should Understand Before Owning Bitcoin as an Investment


The Buying of bitcoin should not be seen as an investment like buying of stocks, bonds or real estate according to billionaire investor Warren Buffett.

Known for his "buy and hold" investment method, the Berkshire Hathaway CEO built his company worth about $82.8 billion through backing companies that have substantive value.

You don't have anything that is producing anything If you buy bitcoin or anyother cryptocurrency, ," "You're just hoping the next guy pays more. And you only feel you'll find the next guy to pay more if he thinks he's going to find someone that's going to pay more Buffett said in an interview with Yahoo Finance.



Buffett thinks that the buying of Bitcoin lacks intrinsic value. Because what you're buying has to be worth something on its own for it to be an investment, he says.
"If you purchase anything such as a farm, an rental house or a share  in an enterprise and look to the asset itself to determine whether or not you've  achieved some thing , what the farm produces, what the business earns ... It's a perfectly satisfactory investment," For instance  . "You wait the investment itself to deliver a return back to you Buffett explains to Yahoo Finance.

He argues that Bitcoin, simply increases in value by means of being offered and bought, its worth comes from what traders are willing to pay for it at a particular time.

Bitcoin traded near $8,759 today according to CoinDesk's price index, it soared from below $1,000 at the start of 2017 to over $19,000 in December, catching the attention of everyone from J.P. Morgan Chase CEO Jamie Dimon to common day traders.

Buffett predict a bleak future for the digital currency he said "In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to an awful ending, when this will happen, how or why, I don't know." Buffett told CNBC in January.

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