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Warren Buffett: Bitcoin Is Pure FOMO

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Re: Warren Buffett: Bitcoin Is Pure FOMO

#101

Earlier quoted context omitted.

Ah yes, something that's never existed before. While true in the technological particulars, it's dead wrong economically. There are all sorts of "never seen before" tradable things that show up in the economy. That people think that cryptocurrencies are so different is evidence that Buffet is right, not the economic newbs. See also the efforts to force "blockchain" into all sorts of round holes where it doesn't fit,…

There is nothing comparable to Bitcoin that previously existed. Gold is perhaps the closest thing.

Haha, gold! The only way that gold is comparable is that similar political commentators are running pump schemes! Otherwise, there are plenty of other commodities that bitcoin is as similar to as gold. Currencies of unstable nations are perhaps more similar to bitcoin than gold is.

And that's just it: nothing new economically about bitcoin. Nothing that hasn't been theorized to death by economists. Politically, it enables a currency for those with massively unstable governments. It enables some black markets. But the idea that this is something new that Buffet isn't getting, is just silly, and that's been borne out by the paucity of any sort of insight from the bitcoin pumpers. Buffet is right that the current soaring and unstable price is driven by FOMO. Nobody knows what the proper size of the bitcoin economy should be yet, and there's almost no way to value it rationally. The most rational pricing of bitcoin is still wild guesses, but the vast majority of purchasers are doing nothing even remotely like trying to establish a price. They are just buying and hoping it soars. Works great until it doesn't.

Re: Warren Buffett: Bitcoin Is Pure FOMO

#102
post #15

Earlier quoted context omitted.

And bitcoin also pays for murders, launders money, etc. I feel, just as cash, it is quite ethics agnostic. Not knocking cryptocoin, just don't pretend it is a singular force for good. It is representation of capitol, albeit in a unique way.

I highly doubt Bitcoin is much used for laundering money, transactions are all happening in clear and if you try to hide traces by creating multiple addresses you are going destroy your capital in transfer fees (which are very high right now). It's clearly not the best currency to hide untraceable money.

I'd argue it's easier to use BTC securely when you're already laundering money than when you want to use it legitimately. Just use throwaway wallets to receive BTC, pay for goods that can be converted to physical cash and proceed laundering that cash as usual.

It's no surprise all the cryptolocker viruses asked for bitcoin payments or cash equivalent cards.

Re: Warren Buffett: Bitcoin Is Pure FOMO

#103
post #90

Scrolling through these threads, I am surprised at how many people are suggesting that Buffet just doesn't get it. That's possibly not wrong. Buffet's desire to not get into stuff he doesn't understand is well-documented. He traditionally has stayed away from tech investments for primarily that reason, and definitely doesn't do bleeding edge tech when he finally does do tech. As the OP alludes to, Buffet actually com…

Here, let me try: In my humble opinion, at today's PE ratio of 43.57, stock price of Coke is completely detached from "the actual cash flow of the business" and is also FOMO and good mostly for speculation. In fact, people are complaining that value is near impossible to find in the current market. Anyone who enters KO at 43.57 (let's say you're just got some money to invest) is risking a ton more than Buffet. "inves…

I'm not sure you addressed the core of his logic. The core of his logic has nothing to do with whether value detaches from fundamentals.

Re: Warren Buffett: Bitcoin Is Pure FOMO

#104
post #90

Scrolling through these threads, I am surprised at how many people are suggesting that Buffet just doesn't get it. That's possibly not wrong. Buffet's desire to not get into stuff he doesn't understand is well-documented. He traditionally has stayed away from tech investments for primarily that reason, and definitely doesn't do bleeding edge tech when he finally does do tech. As the OP alludes to, Buffet actually com…

His logic is very clear, and makes a lot of sense. The problem with it is that despite gold being a bad investment, its value is STILL $9.6 trillion. It has value because it is effectively deflationary, and can be used as a risk-management tool that works better than cash, allowing you to avoid inflation. Buffet knows this, and I even recall that he bought a sizeable amount of silver a while back. I assume he also bo…

Wow, well done. I haven't thought about that. That's interesting food for thought. I guess time will tell.

Re: Warren Buffett: Bitcoin Is Pure FOMO

#105
post #19

Earlier quoted context omitted.

Your argument is that one of the most successful investors in the history of mankind is physically incapable of understanding Bitcoin investment (or anything, for that matter) just because he's old?

He has a different worldview. He's made his money on old way of investing. Some of it applies, some doesn't. He would not be the first successful person to be wildly wrong about a new thing.

I would love hear one thing about investing before that doesn't apply now. Or one thing that Buffet doesn't understand about bitcoin that has any economic relevance.

Those who say he doesn't get it seem infinitely more naive and ignorant than Buffet on this.

Re: Warren Buffett: Bitcoin Is Pure FOMO

#107

Earlier quoted context omitted.

He has a different worldview. He's made his money on old way of investing. Some of it applies, some doesn't. He would not be the first successful person to be wildly wrong about a new thing.

I would love hear one thing about investing before that doesn't apply now. Or one thing that Buffet doesn't understand about bitcoin that has any economic relevance. Those who say he doesn't get it seem infinitely more naive and ignorant than Buffet on this.

One of the main differences is the fact that the value of a currency is fundamentally based on who accepts it. All economic theory prior to this is...i dont want to say outdated but needs to be reprioritized.

Re: Warren Buffett: Bitcoin Is Pure FOMO

#108
post #37

Earlier quoted context omitted.

Not sure why everyone's go-to after someone talks negatively about Bitcoin is "he/she doesn't get it." Exactly what is there to get?

I'm curious about this too. Bitcoin is now essentially an investment venture, no? What is there to get about making money from bitcoin price going up?

Bitcoin's price only goes up as people buy it. "Making money" requires selling it. Selling it causes the price to go down. This is fundamentally the problem—unlike stocks, real estate, and other productive investments, one can only make money in Bitcoin by selling it for a higher price than it was purchased for.

Re: Warren Buffett: Bitcoin Is Pure FOMO

#109

Earlier quoted context omitted.

I don't think most of the young investors these days are participating in a new economy. They are just trading Bitcoin as commodity on exchanges. In which case if they don't get it and Warren does, that's a problem for them.

Exchange is the foundation of any new economy. By creating exchanges, they are creating a foundation of the next economy.

A new economy that supposedly runs on a payment method that doesn't scale so have to resort to various degrees of centralization and trusted third-parties that don't deliver on the original promises of Bitcoin?

I guess I don't see what makes this a new economy and not just the same old economy with new commodity-based payment system.

Re: Warren Buffett: Bitcoin Is Pure FOMO

#110

Sending small to large quantities of wealth worldwide quasi instantly and with small fees does have a tremendous value. Ask families of immigrants. Buffet hasn’t even invested in digital tech stocks. IMO, even after all the huge respect he deserves, he doesn’t get this technology. Other than that, I don’t doubt that many current “investors” are only FOMO movers

When will this false narrative finally die? Bitcoin is practically useless for remittance; I know this from first-hand experience. Bitcoin has to be converted into useable money by the recipient and that process is very inconvenient, slow, expensive and possibly dangerous if you follow the advice of bitcoin enthusiasts and meet up with random sellers in the street. All of this also presumes the recipient is technical…

From the article at the bottom:

About a third of the customers queuing at La Maison du Bitcoin’s teller windows in Paris aren’t speculating on the value of the cryptocurrency. They’re sending digital money home to Africa.

“In many countries in Africa, there are far more cellphones than bank accounts,” said Manuel Valente, co-founder of La Maison. “For bitcoin, all you need is a phone.”

https://www.bloomberg.com/news/articles/2017-11-17/bitcoin-e...

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