The cryptocurrency industry has attracted many critics over the years. Warren Buffett remains an outspoken no-coiner and expects crypto to fall apart soon. Despite the markets recovering in early 2023, Buffett remains convinced the bubble is about to burst.
Warren Buffett Still Doesn’t Trust Crypto
It is always easy to talk in hindsight than to predict the future. Warren Buffett has made various remarks about cryptocurrency over the years. Most of his opinions are very negative, but they only come after a market downtrend. Moreover, he expects crypto to dump further after the 2018 crash. Interestingly, Bitcoin surged to a new all-time high of over $69,000 just a few years later. Rules for traditional markets rarely apply where cryptocurrency is concerned.
Unfortunately, crypto dumped hard in 2022. Bitcoin shed over 65% of its value and had to wait until early 2023 for a market recovery. The recent gains have pushed BTC above $22,000 again after dropping to below $16,000 a few weeks ago. Warren Buffett remains convinced this is a temporary boost and all markets will crater further. No one is surprised to learn he rehashes the same uneducated arguments as in 2018, though.
The primary concern for Warren Buffett is how crypto has “no unique value”. Bitcoin is, in his opinion, an “unproductive asset”. A remarkable sentiment from someone who prefers stocks, which aren’t productive either. The companies issuing those stocks can be productive, and Bitcoin – as a network – has its worth. It provides financial freedom to anyone worldwide without requiring approval. Bitcoin’s use in the payment space remains very limited in 2023, though.
Another concern Buffett has is how crypto “isn’t money”. That is his own opinion and not a fact. Opinions will always differ on what constitutes money and which “criteria” it should meet. In the end, it is crucial to remember Warren Buffett doesn’t understand Bitcoin. Nor does he put much effort into learning it, either. It is a generational trend where older people dismiss everything they don’t know as “useless”. As such, he holds no long or short position on crypto either, which is a sensible decision.
What Comes Next For Bitcoin?
Putting Warren Buffett aside, the year 2023 will be crucial for Bitcoin and crypto. Although there is cautious market optimism in early January, finding stable support levels remains crucial. Unfortunately, it is unclear where those levels may be located. Bitcoin seems stable above $22,000 yet cannot convincingly surpass $23,000. That indicates a push below $22,000 is still possible in the coming weeks.
That said, stocks are not safe from bearish pressure either. Especially tech stocks – tied to “productive companies – are under tremendous market pressure these days. Laid-off employees will continue to dump their holdings to get back at the companies letting them go to save costs. That momentum will push investors to alternative markets, including precious metals and cryptocurrencies.