Forex news: Bitcoin/USD – Bitcoin not a currency: Warren Buffett
**iNVEZZ.com, Tuesday 4 March:**
Warren Buffett, founder of Berkshire Hathaway and routinely touted as the most successful investor of the 20th century, yesterday said he didn’t expect bitcoin to stay around in the longer term.
Two days after releasing his annual letter to shareholders, Buffett spoke to CNBC and touched on many topical issues, including the crisis in Ukraine and even bitcoin.
Buffett posited that in wartime it is much better to hold stocks rather than money or bitcoin, referencing his first investment in 1942, when the Second World War wasn’t going well for the US. He was right to do so because the stock market appreciated during the war and the dollar weakened.
Buffett offered this piece of wisdom: “American businesses are going to be worth more money. Dollars will be worth less, so that money won’t buy you quite as much, but you’ll be much better off owning productive assets over the next 50 years than you will be holding pieces of paper or, I’m not sure, bitcoins.”
As regards bitcoin, Buffett expressed the view that the self-styled crypto-currency “is not a currency”, in that “it is not a durable means of exchange”. The ‘Oracle of Omaha’ said that he “wouldn’t be surprised if it [bitcoin] wasn’t around in the next 10-20 years”.
Meanwhile, the price of one bitcoin is close to hitting a three-week high just a week after the demise of the world’s once-largest bitcoin exchange – the Tokyo-based MtGox. Right now, bitcoin is trading at around $684.61, a gain of 51.3 percent from last Tuesday’s low of $452.22, according to the CoinDesk Bitcoin Price Index which averages prices from the two leading bitcoin exchanges in volume terms.
The market has apparently managed to move beyond the uncertainty created by the MtGox shutdown in what one observer, albeit with a vested interest, describes as the natural process of a maturing marketplace.
Eric Spano, director of finance at the Bitcoin Embassy in Montreal and a director of the Bitcoin Alliance of Canada, yesterday asserted that the rally is due to the fact that investors are starting to understand that the crypto-currency is separate from the exchanges which trade it. “Any issues these companies may be having are not necessarily rated to the Bitcoin protocol or the network itself,” Spano claimed.
“In bitcoin, nobody is too big to fail,” Spano said. “But overall by weeding out the bad actors, bitcoin will become stronger.”
He believes that, whilst the MtGox collapse may have been catastrophic for some investors, bitcoin is still extremely young and that such failures are part of a maturing market. “The people who can’t keep up with the industry or are not prepared… will eventually get kicked out.”
The bitcoin expert observed that, with the dust starting to settle, exchanges are experiencing a trend toward accountability and transparency as the industry shift its focus to prove to customers that the digital currency is secure. He noted that bitcoin exchanges and websites for e-wallets are now implementing different types of audits.
“This [MtGox’s closure] has brought the community together in a way most crises don’t really bring anyone together.”