Why These Old Billionaires Need to Shut Up About Cryptocurrencies

cryptocurrencies are the new markets

Warren Buffett has an approximate net worth of US$84.3 billion. That squarely makes him one of the richest people on earth…and in history.

The ‘oracle of Omaha’ has indeed been able to generate wealth over decades. Wealth that the average person will never, ever get anywhere close to.

He’s a guru of buying poor assets and turning them into valuable assets. Namely companies. He’s a shrewd stock investor. And the world hangs on every word he says about stocks and markets.

Did your Grandad ever sit you down and tell you stories as a kid? You know, the ones where Grandad is clearly talking out his backside because he knows nothing about the subject matter? The kinds of stories Grandad believes to be true, but the reality is he’s really out of touch with the modern world?

I think you know what I’m getting at.

Today news reports hit the wires about Warren Buffett’s views on cryptocurrencies. Here’s what the ‘oracle’ had to say,

In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending. Now when it happens, or how or anything else, I don’t know. 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.

Ah, Grandad. You’ve forgot to put your pants on again…

I typically don’t pass comment or judgement on the extinction of sauropods during the Cretaceous period, because I don’t understand it. If I was a dinosaur expert then sure, maybe I’d have something to say.

And importantly, I’d having something worth listening to.

But I don’t know it. Don’t understand it. I’m not an expert in it. Therefore I have no right to say whether or not it was justified.

But if I did comment on it, do you think palaeontologists from the British Natural History Museum would listen to me? Do you think they’d give two hoots?

Of course not!

What you need to understand here is very simple. Warren Buffett is an expert in companies and stocks. He’s been around long enough to know a thing or two there.

In no way am I challenging his reputation or expertise in traditional markets.

But he knows nothing about cryptocurrencies. As such, he should check himself at the door and sit, listen and reserve judgement until he understands more.

Otherwise he just comes across as another old, white, male multi-billionaire that’s lost touch with real people.

What the old rich guy meant to say

Buffett joins a long list of old rich white guys damning cryptocurrencies. But he’ll come around soon. After all, Jamie Dimon did.

Remember him? He’s the old billionaire that runs JP Morgan. Dimon’s wealth is comparatively meagre compared to Buffett’s. Dimon’s only worth around US$1.18 billion. Poor bastard.

Well Dimon was a huge anti-Bitcoin and crypto proponent. ‘Fraud’, ‘scam’, think of all the usual words the ignorant use to describe crypto. He used them all.

The favourite was always the ‘Dutch tulip bulbs’ comparison. That one really puts a smile on our face. It’s the catch cry for anyone who simply has no idea about cryptocurrencies. 

But as you’d have it, Mr. Dimon isn’t so sure about his previous comments now.

In fact, he said only just this week that he has ‘regret’ over his comments on crypto. As reported by Coindesk,

Dimon made the fraud comment [about bitcoin] on Sep. 12 of last year, adding that he would fire any trader known to be trading the cryptocurrency.’

The CEO told Fox Business today, “The blockchain is real. You can have crypto yen and dollars and stuff like that. ICO’s you have to look at individually.”’

Speaking to Fox Business, Dimon also said,

The bitcoin to me was always what the governments are gonna feel about bitcoin as it gets really big, and I just have a different opinion than other people. I’m not interested that much in the subject at all.’

That’s right people. That’s what you call a ‘180’.

We don’t think it will be that long before Buffett does the same.

We half suspect that Dimon’s about-face is so JP Morgan can open a crypto trading desk. That will let them head into crypto markets both with actual purchases and by dealing in the futures markets.

We think Buffett will come around just because he has to.

This is the new market, so get involved

Crypto markets are the new markets. They are legitimate forms of capital raising. They are real ways to improve both the efficiency and effectiveness of global trade and commerce.

They are a whole new financial and social construct that is here to stay. In other words, you’re currently witness to one of the most seismic shifts the world has ever seen.

And when hardcore anti-crypto people like Jamie Dimon are doing a double take, you know this isn’t a one-off or a fad. You know that it won’t just pack up and disappear.

Sure, there’s going to be a rocky road ahead. We’ll see crypto failures, we’ll see market crashes. But we see that in traditional equity markets all the time. And no one suggests that one day there will be no stock market, do they?

That’s the view you need to be taking with crypto. Think about it for what it is — new markets. You can trade in them, invest in them, and even take part by doing your own project within them.

If you can justify the purpose and existence of a crypto token for your business, then maybe it’s a capital market you should consider. Not just for the fact of cheap and easy money. That’s actually not the real value in crypto markets.

Network effect is the real value driver. Building a community of users, participants, traders, speculators, everyone. If you can build a crypto community and deliver a project with real world use and purpose, then you could be onto a winner.

It’s something that traditional markets simply don’t enable because of red tape and bureaucracy. But in crypto markets, everyone gets a chance to make and create something. That comes with trappings and pitfalls.

But overall, it’s one of the most exciting developments the world has ever seen.

Sam Volkering,
Editor, Secret Crypto Network

Sam Volkering

Sam Volkering is Editor for Money Morning and its small-cap, cryptocurrency and technology expert. Find out what he has to say here with all his latest articles.

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