Warren Buffett, the legendary investor and CEO of Berkshire Hathaway, has been vocal about his skepticism toward cryptocurrency. While digital assets have gained traction among investors, Buffett has repeatedly dismissed them as speculative and lacking intrinsic value.
Here’s a detailed breakdown of why he avoids crypto, backed by his own words and industry insights.
Crypto Lacks Intrinsic Value
Warren Buffett believes in investing in assets that produce something tangible—like companies that sell products or offer services.
Cryptocurrencies, on the other hand, don’t generate earnings or cash flow. Their value is driven largely by supply, demand, and market sentiment. In Buffett’s view, that makes them speculative rather than productive.
At the Berkshire Hathaway Meeting in 2022, he stated, “Now if you told me you own all of the bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it?”
High Volatility and Speculation
Cryptocurrency markets are notoriously volatile. Bitcoin, the leading digital currency, has seen dramatic price swings, making it a risky investment. Its price has fallen 22% from its all-time high of $109,000 on January 20, 2025.
Buffett has always preferred stable, predictable investments. In Fortune 2018, he described Bitcoin as: “Probably rat poison squared.” His investment philosophy is rooted in long-term value, which contrasts sharply with the speculative nature of cryptocurrencies.
No Tangible Output or Business Model
Buffett looks for businesses with clear models, strong leadership, and a history of generating revenue. Cryptocurrencies don’t operate like businesses. They don’t have earnings reports, products, or management teams. There’s no operational performance to assess or income to count on—only the hope that the value goes up.
While equities like Berkshire’s stake in Chevron provide quarterly dividends, bitcoin’s returns depend solely on price appreciation. For Buffett, this makes crypto akin to gambling: Winners profit only if others buy at higher prices.
Concerns Over Regulation and Security
The crypto industry remains largely unregulated, leading to frequent cases of fraud, hacking, and financial instability. Buffett has historically shied away from markets with uncertain regulations and high risks of manipulation.
A 2023 Chainalysis report found that crypto-related frauds led to over $ 46.1 billion in investor losses. Buffett’s cautious approach to investment makes him wary of such risks.
Comparison to Historical Speculative Bubbles
In a CNBC 2018 interview, Buffett stated, “In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending.”
Despite bitcoin’s 2024 rebound, he views it as a speculative bubble detached from economic reality. His skepticism mirrors historical warnings: In 2000, he avoided dot-com stocks before their crash. He believes that many investors are driven by FOMO (fear of missing out), rather than sound financial principles.
Limited Use Cases for Everyday Consumers
Despite the growing adoption of digital currencies, their mainstream use remains limited compared to fiat currencies. Many businesses hesitate to accept crypto due to its volatility, reinforcing Buffett’s doubts about its real-world utility.
A 2022 Deloitte report noted that while businesses are exploring crypto, adoption is still in its early stages.
Buffett Indirectly Invested in Crypto
Although Buffett avoids direct investments in cryptocurrencies, Berkshire Hathaway has made indirect investments in firms involved in the crypto space. In 2021, Berkshire invested $500 million in Nu Holdings, a Brazilian digital bank offering crypto services, followed by another $250 million.
However, these investments were based on the company’s broader fintech potential, not because of its crypto offerings.
Focus on Time-Tested Investments
Buffett has always emphasized investing in businesses with long-term potential and consistent earnings. His portfolio includes companies like Apple, Coca-Cola, and Bank of America—firms with proven records of profitability and growth.
He stated, “If you aren’t thinking about owning a stock for 10 years, don’t even think about owning it for 10 minutes.”
Energy Consumption Concerns
Another reason Buffett might steer clear of cryptocurrency is the high energy cost associated with it—especially Bitcoin. The process of mining Bitcoin consumes massive amounts of electricity, often exceeding the annual usage of some small countries.
This raises environmental concerns and adds to the list of inefficiencies Buffett typically avoids. For an investor focused on long-term sustainability and value, the resource-heavy nature of crypto is a major drawback.
The Buffett Philosophy
Buffett’s golden rule is to invest only in what he understands. He has admitted that he doesn’t fully grasp how cryptocurrencies work, which makes him hesitant to invest.
This aligns with his broader approach to risk management, where he avoids sectors he cannot analyze thoroughly.
No Ownership Stake in Productive Assets
When you buy Bitcoin, you don’t own a share of a company, earn dividends, or get voting rights. Buffett prefers owning parts of businesses that build, hire, and grow—assets that give investors a stake in real-world productivity. In contrast, cryptocurrencies are digital tokens without ownership utility.
As he told shareholders in 2020, “You don’t own anything when you buy bitcoin.” Unlike stocks, crypto grants no voting rights, profit shares, or claims to physical assets. Even Berkshire’s Nu Holdings investment targeted the bank’s financial services, not its crypto platform.
