Business and Investing Leaders on Cryptocurrency
Everyone has been talking about cryptocurrencies, namely Bitcoin, for the past few years. Especially last December, when Bitcoin was trading at almost $20,000!
It’s currently at $5,586.
There’s constant talk about Bitcoin’s chance of bouncing back to five figures. There’s constant talk about Bitcoin’s chance of bursting its bubble. There’s constant talk about new cryptos.
People are talking about cryptocurrencies at home, at work, and at school. Hell, I was in the grocery store last night, and I glanced at a magazine that had a piece on crypto!
With all this talk about crypto, one could wonder: What do leaders in business and investing, like Bill Gates and Warren Buffett, actually think about cryptocurrencies?
This week, I’d like to highlight the opinions on cryptocurrencies of several notable figures in the business and investing world.
You may recognize Kevin O’Leary from ABC’s Shark Tank. Alongside other notable investors like Daymond John and Mark Cuban, he meets with guest entrepreneurs and decides whether to invest in the guests’ companies.
On the show, he’s also known by his nickname, Mr. Wonderful.
Kevin O’Leary founded SoftKey Software Products in the 1980s and ended up selling the company to Mattel in the ’90s, making millions of dollars. He also took a stab at running for the leadership of the Conservative Party of Canada in 2017.
O’Leary thinks cryptos are “a long way from being a currency.”
Bitcoin and other cryptos can jump from one price to another pretty quickly. For example, Bitcoin dropped to under $5,400 last week — a 10% loss in about a day’s time.
This level of volatility doesn’t gel for planned transactions to be paid in crypto. The amount of Bitcoin to be transacted could drop in value by the transaction’s end.
“If clearly neither side thinks it is stable enough to transfer in one minute, and they don't even want to take one minute of risk, it is not a currency,” said Mr. Wonderful.
However, Kevin O’Leary does think cryptos are assets. Actually, he thinks they’re “one of the most successful assets on the planet right now because it's a global speculation.”
So although Mr. Wonderful doesn’t believe in cryptos being currencies, at least he identifies that they’re lucrative assets.
Tony Robbins is an author of self-help books, a motivational speaker, a life coach, and an entrepreneur worth hundreds of millions of dollars.
Robbins considers Bitcoin to be “very iffy.” Similar to Kevin O’Leary, Tony Robbins finds crypto too volatile.
Robbins has said something intriguing about crypto: “I look at that as it's like going to Vegas.”
By that, Robbins means investing in crypto is fine, as long as you are only putting in what you’re all right with completely losing. In Las Vegas, you should only gamble with an amount you’re comfortable with losing, as you’re more likely to have losses than win anything.
Robbins is comparing investing in cryptos to gambling. In his words, “I know it is just for fun I'm investing, I know I could lose, this is Vegas.”
CNBC’s Jim Cramer has an opinion on crypto similar to Mr. Wonderful and Robbins. The host of CNBC’s Mad Money and co-founder of financial news site TheStreet says crypto are “kind of like 'Monopoly' money” and they’re “an oddity that has nothing to do with us [investors].”
Just like Tony Robbins, Cramer likens investing in crypto to gambling in Las Vegas. According to Cramer, “If you want to gamble, go to Vegas. Vegas is fabulous.”
When Bitcoin dropped under $6,000 — where it currently remains — Cramer noted that the beginning of crypto’s end may be arriving, saying, “I'm not saying its time has passed but there is a notion that the sun seems to be setting.”
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Microsoft’s co-founder Bill Gates doesn’t think too fondly of cryptocurrencies.
Like O’Leary, Robbins, and Cramer, Gates also finds cryptos to be volatile and risky. Additionally, he noted that although they’re assets, they aren’t producing anything, so there can’t be an expectation of their value rising.
He is also wary of crypto’s anonymity aspect. According to him, “The government's ability to find money laundering and tax evasion and terrorist funding is a good thing.”
Gates has blamed cryptocurrencies for drug-related deaths, as people have purchased fentanyl and other dangerous substances with cryptocurrencies.
Aside from having a similar opinion to Kevin O’Leary, Tony Robbins, and Jim Cramer, Bill Gates has an interesting spin on buying cryptos. In an interview with CNBC’s Squawk Box, Gates said, “I would short [cryptocurrencies] if there was an easy way to do it.”
By shorting them, Gates is referring to futures and put options on crypto. Basically, he’d be betting on its losses.
Despite his opinion on cryptocurrency, Bill Gates does see positive use and benefit with blockchain technology.
Lastly, we have Warren Buffett, the Oracle of Omaha.
Buffett is actually quite bearish on cryptos, advising that they’re bad investments. In fact, he’s been quoted calling Bitcoin “poison squared” during an interview with CNBC.
Buffett doesn’t even see cryptos as actual investments, since they lack intrinsic value. He believes crypto investors are investing in emptiness.
According to him, “You're just hoping the next guy pays more. And you only feel you'll find the next guy to pay more if he thinks he's going to find someone that's going to pay more. You aren't investing when you do that, you're speculating.”
Warren Buffett thinks, “with almost certainty,” that cryptocurrency will “come to a bad ending.”
It appears that the business and investing leaders covered today don’t think too fondly of cryptocurrencies. They’ve homed in on the weak aspects of crypto, such as its volatility and anonymity, and continue to be bearish.
But I think they’re missing something about crypto that would potentially sway them in a more bullish direction...
The fact that cryptocurrencies have facilitated a wave of innovation in blockchain technology wasn’t factored into their opinions. Bill Gates was the only leader who noted blockchain’s use and benefit.
We now have better supply chains and transaction tracking, and some are even using devices to vote, all because crypto gave rise to blockchain around the world.
If business and investing leaders grasp that undeniable fact harder, perhaps we’d see a more bullish opinion of cryptocurrencies.
Now, keep in mind that Warren Buffett, one of the most successful investors to have ever lived, has been wrong twice so far...
First, he dropped the ball on investing in Google, not appreciating its intrinsic value. Second, he passed up on Amazon. He’s admitted that he was “too dumb to realize” that Bezos and Amazon were truly onto something. He added that he “really underestimated the brilliance of the execution.”
If Warren Buffett can be wrong on two of the most successful companies around the globe, then surely there’s room for him to be wrong on crypto as well.
John Butler, Jr.
Contributing Editor, The Token Authority