Warren Buffett is one of the greatest economists that the world has ever seen. During his career, Warren Buffett was a Nobel Prize winner for the economy. However, his business skills say more about him than any other award or news article. During his career, Warren Buffett managed to create a multi-billion worth business empire and many are calling him the most successful businessman ever. Besides that, he is always present on the list of the richest people in the world. Because of that, when he says something about the economy many believe it to be true.

In 2014, during one interview Warren Buffett was asked about the Bitcoin and cryptocurrencies in general. His response has surprised everyone that time. He advised people to stay away from it saying that Bitcoin is basically a mirage. Besides that, he also questioned the intrinsic value of Bitcoin that many gladly share when they talk about this digital currency. All in all, Buffett did not have nice things to say about the Bitcoin. However, three years have passed since this interview and has something changed?

Well, it has. Bitcoin did not collapse as some experts warned against in that time but it continued to grow. Even though many agree that Bitcoin is based on speculation, the value of this digital currency has continued to grow over the past three years. Just this year, Bitcoin has already reached the $5,000 mark which is something that rarely anyone could have predicted in 2014 or even later.

However, Buffett did not predict the exact time when Bitcoin might collapse as he warned investors about the charms of ‘effortless money’ as he stated it. In 2000, Warren Buffett wrote that speculation is dangerous the most when it seems easy and this is exactly what we are seeing with Bitcoin in the last couple of months. The value of Bitcoin has been rising drastically and many experts believe that is a sign of a huge bubble that would have collapse eventually.

Because of that, Warren Buffet might be right when he said that Bitcoin is a mirage. However, Bitcoin had a very stable period in the recent time that led many to conclude that this might not be a bubble after all. Considering that the entire market of digital currency is based on speculation it will never be possible to say that this market will not collapse at all. Warren Buffett is not the only economist and billionaire warning against Bitcoin.

Howard Marks is also a billionaire and he also warned investors about the dangers that might come with the speculative nature of digital currencies. Marks compared the current situation with Bitcoin to the situation in 1637 where there was a tulip mania, and the one from 1999 when Internet took over the world. He also said that Bitcoin and other digital currency actually do not have true value because there is nothing you can get except what the people are ready to pay for it. Buffet and Marks have been right in their predictions during previous years and because of that, Bitcoin investors need to be careful as it is possible that Buffett might be right about this as well.

Written by Vedran Ostojic

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