Today’s edition of Bitcoin in Brief focuses on a clash between the old guard of the global economy, fearing new innovations they can’t understand, and the young entrepreneurs using them to change the world. We will also show how sometimes well-meaning regulations can backfire and hurt the lawmakers’ own goals.
They say that “if you’re not catching flak you’re not over the target,” so bitcoin must be getting closer to hitting Wall Street because it has gotten a lot of flak recently. Leading the charge was 87-year-old billionaire and legendary investor, Warren Buffett. After previously saying that investing in bitcoin is nothing more than gambling, Buffett has again came out strongly against cryptocurrency at Berkshire Hathaway’s annual meeting on Saturday, May 5th.
“They’re non-productive assets. It essentially will not deliver anything other than supposed scarcity. What does it produce itself? Anytime you buy non-productive assets, you are counting on someone later on buying a non-productive asset. It does come to a bad ending; cryptocurrencies will come to a bad ending. 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,” he said, concluding that bitcoin is “probably rat poison squared.” And Buffett’s long-time right-hand-man, Charlie Munger, added that trading in cryptocurrencies is “just dementia”.
Musk Strikes Back
Besides bashing bitcoin, Buffett has also taken a swipe at fellow billionaire Elon Musk.
During the latest Tesla quarterly earnings call, Musk explained he doesn’t believe in “moats,” a term often espoused by the Oracle of Omaha. He said: “I think moats are lame. They are like nice in a sort of quaint, vestigial way. If your only defense against invading armies is a moat, you will not last long. What matters is the pace of innovation, that is the fundamental determinant of competitiveness.”
Buffett didn’t like that statement and on Saturday responded by warning that Musk should stay away from his moated ventures. “I don’t think he’d want to take us on in candy,” he said, referring to Berkshire-owned See’s Candies – Buffett’s often cited example of a business with a deep moat around it. The real-life inspiration for Iron Man saw Buffett’s warning as a challenge and soon announced on Twitter he is starting a new candy company to take on Berkshire’s moat, and just to spike the ball he is going to call it “Cryptocandy”.