To The Moon

$Berkshire Hathaway(BRK.A)$

Few investors in history have wielded as much influence—and delivered as much enduring success—as Warren Buffett. As chairman and CEO of Berkshire Hathaway, Buffett has built one of the most admired and profitable conglomerates ever, thanks to his patient, value-driven investment approach. Yet even as cryptocurrencies like Bitcoin, Ethereum, and others have attracted trillions of dollars of investor capital, Buffett remains steadfast in his refusal to invest.

“Bitcoin is probably rat poison squared,” he famously quipped in 2018. In 2022, he went even further, saying he wouldn’t buy all the Bitcoin in the world even if it were offered to him for $25.

Why does the Oracle of Omaha continue to reject an asset class that many consider revolutionary? Here are his main arguments.

1. It’s Not a Productive Asset

Buffett’s investment philosophy, honed under the tutelage of Benjamin Graham, prioritizes intrinsic value. He invests in businesses that generate cash flows—companies that produce goods and services, pay dividends, and create tangible economic value.

By contrast, Bitcoin and other cryptocurrencies produce nothing. They don’t generate earnings, pay interest, or distribute dividends. Their value depends solely on what someone else is willing to pay for them in the future—a concept Buffett often calls “the greater fool theory.”

“If you buy an apartment building, it’s going to produce rent for you. If you buy a farm, it’s going to produce crops. But if you buy something like Bitcoin or some cryptocurrency, you don’t have anything that is producing anything,” Buffett said.

In his view, owning Bitcoin is akin to owning gold—except, in his words, “at least gold has some use for jewelry and industry.”

2. It Has No Intrinsic Value

Buffett has always emphasized the difference between price and value. Price is what you pay; value is what you get.

In his assessment, Bitcoin has no calculable intrinsic value—it is worth only what the next buyer is willing to pay. Unlike stocks, whose value can be estimated based on earnings, assets, and future cash flows, Bitcoin offers no objective basis for valuation.

“It doesn’t produce anything. You can stare at it all day and no little Bitcoins come out or anything like that,” he has said.

For Buffett, that makes Bitcoin speculative, not investment-grade.

3. It’s Not a Currency

Bitcoin’s creators envisioned it as a decentralized alternative to government-issued money. But Buffett remains unconvinced that cryptocurrencies serve as reliable currencies.

A good currency, in Buffett’s view, must be a medium of exchange, a unit of account, and a store of value. Bitcoin and its peers fail all three tests, in his opinion:

• Too volatile to serve as a stable medium of exchange.

• Not widely used as a unit of account.

• Speculative and prone to bubbles, undermining its role as a store of value.

“It’s a mirage. Basically, it’s a method of transmitting money. It’s a very effective way of transmitting money and you can do it anonymously and all that. But a check is a way of transmitting money too,” Buffett has said.

4. It Attracts Speculation, Not Investment

Buffett draws a sharp distinction between investing—buying something that produces value—and speculating—buying something in the hope that someone else will pay more later.

He sees cryptocurrencies as purely speculative vehicles, vulnerable to the whims of crowd psychology, with no economic foundation beneath their prices.

“You aren’t investing when you do that. You’re speculating. There’s nothing wrong with that. If you want to gamble, somebody else will come along and pay more money tomorrow, that’s one kind of game. That is not investing,” he explained.

5. Regulatory and Fraud Risks

Buffett also worries about the regulatory risk and the role cryptocurrencies play in enabling illicit activity. Although blockchain technology itself has valid use cases, he sees Bitcoin as a magnet for fraudsters, Ponzi schemes, and tax evasion.

In his view, the speculative frenzy around crypto is dangerous for retail investors who don’t understand what they’re buying but are lured by stories of overnight riches.

6. It’s Outside His Circle of Competence

Perhaps most importantly, Buffett sticks to what he calls his circle of competence—businesses he understands deeply. He admits he doesn’t fully understand cryptocurrencies or the psychology that drives their prices, and therefore prefers to stay away.

This humility, ironically, is one of the reasons for his long-term success: he only invests when he believes he has a clear informational and analytical advantage.

A Lesson in Discipline

Warren Buffett’s continued refusal to invest in Bitcoin and cryptocurrencies underscores a core principle of his philosophy: don’t invest in things you don’t understand, and don’t chase what everyone else is chasing.

He doesn’t deny that people have made (and will continue to make) money speculating on Bitcoin. But his goal is to invest in assets that produce predictable, compounding value over decades—not to gamble on price movements.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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