Warren Buffett is considered one of the greatest investors of all time. Its natural success for more than half a century in traditional financial markets has made it possible to make a huge fortune. According to the most current data, Buffett’s personal fortune is estimated at approximately $ 85 billion.
As for such a young phenomenon as Bitcoin and cryptocurrencies, the famous billionaire is fundamentally skeptical of them. Buffett has long earned a reputation as one of Bitcoin’s main haters. However, if you study its key principles and approaches to investing more carefully, you can understand that Buffett, in fact, has the mindset of the real “Bitcoiner”. This may surprise at first, but just read today’s story, and you will immediately understand everything.
Warren Buffett Hates Bitcoin
The billionaire investor is known as a proponent of value-oriented investment philosophy. He is an absolute fan of the work of Benjamin Graham, one of the founders of this philosophy. The Oracle of Omaha, as Buffett is called in financial circles, has also long convinced everyone that he will never invest in areas he does not understand.
True to his philosophy, Warren Buffett missed out on many promising investment opportunities in the technology world during the rise of the GAFA in the late 1990s. His official position regarding Bitcoin is fully consistent with his philosophy. As he once stated:
“Bitcoin is rat poison squared.”
Obviously, such a vision, it would seem, fundamentally contradicts the mentality of bitcoiners. But! If you take a look at its four basic investment rules and transfer them to Bitcoin, you will see that Warren Buffett really treats money the same way bitcoins treat Bitcoin.
Rule # 1: Bitcoin is the King
Warren Buffett often reiterates that money is king in financial markets. Therefore, you must be flexible enough and use the opportunities available to you.
Bitcoiners are also convinced that Bitcoin is the king.
They see other cryptocurrencies as miserable copies that have no future. Bitcoin is the only true cryptocurrency that you can buy and accumulate. Such a radical position is known as Bitcoin maximalism.
By the way, the dominance of Bitcoin in cryptocurrency markets is around 70%. This is simply colossal, but it is fully explained by the fact that the general public often associates the world of cryptocurrencies with Bitcoin, the flagship.
New entrants always buy BTC first, which allows the Bitcoin market to be much more liquid than other cryptocurrency markets.
Bitcoin’s hegemonic position is reinforced by the fact that in order to purchase most alternative cryptocurrencies – or the so-called altcoins – you first have to buy Bitcoin for fiat money.
Finally, in a fairer world of the future, which Bitcoin is bravely building block by block, owning bitcoins will be as important as owning cash today.
Rule # 2: Use caution when others are greedy
When people ask Warren Buffett about the secret of winning stock market investments, he often answers like this:
Be careful when others are greedy and be greedy when others are careful.
This is just the philosophy of bitcoiners. They are cautious when the Bitcoin market gets out of control, as it was at the end of 2017, for example.
On the other hand, during a long bearish trend throughout 2018, many impatient or unbelievers capitulated and sold off their coins. In turn, bitcoiners used this opportunity to accumulate even more coins.
Therefore, the behavior of Warren Buffett and bitcoiners is similar in terms of choosing the perfect moment to invest.
Rule # 3: Always Buy Bitcoins When They Are Underestimated
Warren Buffett’s value-oriented investment philosophy is to always buy stocks of undervalued companies.
For investments to be winning, you must be able to recognize the potential of undervalued stocks.
This philosophy also corresponds to the philosophy of bitcoiners, which continue to accumulate more and more BTC, because they believe that now the main cryptocurrency is largely underestimated.
Bitcoiners are convinced that Bitcoin is a revolution that in the future will become an alternative to the current monetary system.
Such a scenario will lead to the massive adoption of Bitcoin and, thus, to its increasing applicability. As demand grows, Bitcoin’s price will rise to levels we have never seen before. Some predict that the price of BTC will reach at least $ 100 thousand by 2025, while others predict growth to $ 1 million by 2030.
Since bitcoiners expect such price levels, it is logical to assume that now the coin is underestimated. Thus, most likely, they will continue to buy bitcoins further.
Rule # 4: Buy and Store Bitcoins
If you want to make successful and profitable investments, then Warren Buffett advises betting on the long term. After you have chosen shares for yourself, they must be redeemed and held as long as possible. Allegedly the only way to maximize profits.
Bitcoiners treat Bitcoin the same way Warren Buffett refers to stocks. They buy and store (go, if the crypto community is on slang) their BTC.
This explains why bitcoiners are not particularly worried about the decline in the price of Bitcoin from $ 20 thousand at the end of 2017 to $ 3 thousand – a price that lasted almost the whole of 2018. Now the coin has slightly “gained weight”, but it is still far from the previous maximum.
Their unwavering confidence in Bitcoin encourages them to continue to accumulate bitcoins. It is worth noting that patience is fully justified by an excellent result, especially if you trace the price trend of Bitcoin from its appearance to today.
Warren Buffett is a fierce adversary of Bitcoin. This is well known. The reason is simple: Bitcoin is a kind of technological revolution that Warren Buffett does not understand. He is used to not investing in areas that he does not understand. But perhaps his approach will change, or he will still understand the value embedded in Bitcoin.
Nevertheless, Buffett has the thinking of modern bitcoiners, he just does not know about it yet. Although, given his capital and age, Warren Buffett could well afford to miss the Bitcoin revolution.
Everyone else should seriously think about whether you can afford to miss the Bitcoin revolution. Perhaps this is where we will leave you alone with us so that you can reflect on the answer to this question.