Re: Warren Buffet advise not to buy bitcoin. Expect bitcoin price to collapse.
I may not know the price of tea in China but I do know that's not the subject of discussion here.
As for intrinsic value, Buffet said:
Quote
Stay away from it. Its a mirage, basically.
Its a method of transmitting money. Its a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money, too. Are checks worth a whole lot of money just because they can transmit money? Are money orders? You can transmit money by money orders. People do it. I hope Bitcoin becomes a better way of doing it, but you can replicate it a bunch of different ways and it will be. The idea that it has some huge intrinsic value is just a joke in my view.
There's no intrinsic value in fiat, yet you don't see him bashing USD. If he doesn't buy currency then he should say that, but as for comparing btc to checks and the lot, that goes back to my previous comparative analysis to show you that the value is in the ability to move money quickly, easily, and safely. BTC's system allows for money to move quickly and easily, individual transactions are safe however the system (or culture) is not safe -- yet.
It doesn't matter how you define 'intrinsic value' btc is a currency that includes a method of moving money quickly, easily, and at extremely low costs. There is no fiat that does that. All fiats need other systems to provide for the movement of their currency. Fiat's electronic money is moved in various ways, via wire or ACH, there's no intrinsic value in the electronic wire, however the business of electronic wire transfers is worth trillions; likewise the intrinsic value of connecting fiat to plastic credit/debit cards is also a big money maker, if the value is not in the electronic nature of the currency why would anyone spend more for one electronic service over another -- speed and ease of use that's why. As such even if you discount BTC's currency as worthless, it's ability to move money quickly and easily makes it worth billions by any reasonable standard.
If you asked him if investing in USD (i.e. stuffing a matress with cash) is a good investment he'd probably tell you you're an idiot.
Who cares if you can send bitcoins all over in digital space? What does it have to do with the price? You can do this whether it's $1 or $1000 per Bitcoin. If you think there's a potential big business in transmitting Bitcoin money then invest in Coinbase or something similar.
Money or currency is just the intermediary for exchange economy. The 'intrinsic' value is in the product or service being exchanged. The business that creates products or services has intrinsic value. That's his point. The investment thesis of Bitcoin is false, "it's a mirage"
Buffett is a fundamental investor. Fundamental investing is buying something at discount compared to future cash flows. What's the future cash flow of Bitcoin? None because it's price is speculative commodity. Like beanie babies or gold. If you think it's a currency then that's double stupid. Nobody invests in currencies. They trade currency pairs
You don't invest in currency by "stuffing a mattress with cash" that's called 'saving'. Currency trading is a totally different animal, you should know if you are in crypto, given all of the cryptocurrency trading exchanges available. Long before crypto exchanges there were currency exchanges for fiat (still exist).
Anyway, as for your "who cares ..." statement, the answer is everyone. And as for "what does it have to do with the price" the answer is everything. Checks take days to clear, ACHs generally go faster, and wires faster still, speed of flow is the largest determinate for the price/fee charged -- ask western union.
The "cash flow" question is just stupid. And if you don't think BTC is a currency then you don't know the definition of the word currency. A currency is a means of exchange between buyer and sellers for goods or services. Currency is a commodity when it is the good that is being purchased or sold and not the means for the transfer. As such most of the transactions done on most non-btc exclusive exchanges (ie: Cryptsy) are using BTC as the mainstay currency to buy and sell other currencies as commodities.
When a currency is used as a currency to buy something ELSE such as a book that currency is unquestionably a currency. Gold has very many different uses mainly in manufacturing (ie: jewery), but also as a commodity, and as currency but rarely as currency. Gold cannot be transferred electronically.
"Nobody invests in currencies. They trade currency pairs"
Huh!, now you're just being a stupid idiot ... in case you are not stupid and just an ignorant idiot here: http://en.wikipedia.org/wiki/Foreign_exchange_marketLOL you sent me a wikipedia link to forex which proves my point about trading currency pairs.
You have no clue about money markets and why it exists and how it works. You're just a noob retail investor trying to school me with your rudimentary understanding. Try reading that wiki in entirity before embarassing yourself again.
Bitcoin is a currency on the level of Chuckee Cheese tokens. Like Chuckee Cheese token you can buy stuff with it. But its not even on the level of one of the worst national currency like Vietnamese Dong