Why Warren Buffett is Wrong on Bitcoin

In an uncharacteristically uninformed rant, Warren Buffett has shown that when it comes to bitcoin and the blockchain, the technology that underpins cryptocurrencies, the world’s most famous investor hasn’t done his homework.

Don’t get me wrong — at Nexo, we are full of admiration for the Oracle of Omaha. We even benchmark our company’s relatively modest achievements against his. The 4.8% dividend yield of our eponymous token, NEXO, outperformed the yield of every dividend-bearing stock in Warren Buffett’s portfolio in the last 7 months of 2018.

But many of his claimsare just as widely held as they are misguided and if our industry is to thrive and investors to benefit, we need to respond to them head on. Allow me to address just 5 of them Buffett rattled out last week.

  1. “It’s a gambling device…”
    So for the first several thousand years of civilization before Bitcoin, humans never gambled on anything? Gambling and the problems that come with it are a part of human nature, but it’s the urge that drives us more than the medium via which people engage in gambling.
    We do not recall Mr. Buffett calling stocks gambling devices when the dot-com bubble burst and millions of Americans lost their life savings.
    Incidentally, illegal betting on sports alone generates more than $250 billion a year, more than the current market cap of all cryptocurrencies combined. If you’re looking for something to blame, you’re barking up the wrong tree.

As investors who look up to the Berkshire Hathaway CEO for his impeccable track record and humility, we are disappointed by his one-sided views on the asset class. We believe that it is precisely the constant questioning of traditional concepts and the unquenchable thirst for knowledge that got him where he is today.

Both Bitcoin and the blockchain are on their way to an incomparably bright future. We won’t hold a grudge against Mr. Buffet. As a matter of fact, we looking forward to the tokenization of Berkshire Hathaway. Nexo will be there and ready to extend loans against their collateralized stock.

Managing Partner at Nexo- The World's First Instant Crypto Credit Lines

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