World renowned investor and chief executive officer of Berkshire Hathaway, Warren Buffett, has said cryptocurrencies are not an investment and compared purchasing them to gambling. According to Buffett purchasing a virtual currency like bitcoin (BTC) has no returns since it produces nothing and all a buyer is doing is expecting the next person to pay more for it.
?Now, if you buy something like bitcoin or some cryptocurrency, you don?t really have anything that has produced anything. You?re just hoping the next guy pays more,? said Buffett in an interview with Yahoo! Finance.
This is not the first time that Buffett is expressing his skepticism of digital currencies. Buffett?s longtime business partner, Charlie Munger, is also an avowed cryptocurrency skeptic. Earlier this year Munger compared cryptocurrencies to noxious poisons.
Not all prominent investors are skeptical of bitcoin though. Tim Draper, a billionaire venture capitalist recently predicted that the price of bitcoin will reach $250,000 in the next four years. Draper who was an early supporter of technology startups such as Hotmail, Skype and Tesla also expects bitcoin will turn out to be the biggest investment of his life.
According to Draper in the next five years the use of cryptocurrencies will be so prevalent for everyday transactions that trying to buy coffee using fiat currencies for instance will only be done by technology dinosaurs.
In 2014 Draper acquired bitcoins numbering 30,000 at an auction held by U.S. Marshals Service. Last year in December Draper revealed to CNBC that he had not disposed of his bitcoin holdings indicating that his investment in the leading digital currency in the world by market capitalization is now worth hundreds of millions of dollars.
Besides Draper, Pfeffer Capital?s partner, John Pfeffer, has also set a bold prediction by saying bitcoin should reach $700,000 though he didn?t give a timeline. Additionally Pfeffer said the virtual currency could replace gold as a non-sovereign store of value making it a new reserve currency.
Other than bitcoin Pfeffer has invested in various digital currencies but now concentrates on just bitcoin. According to Pfeffer this is because he views the rest as utility tokens and only bitcoin works as purely money.
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