Warren Buffet Strikes Back on Crypto
By: Parul Gujral
Tags: Blockchain, Cryptocurrency, Ethereum, Bitcoin, Snowball

Cryptocurrency received some negative comments from big-money names this last week.

Warren Buffett, the CEO of Berkshire Hathaway, was quoted on CNBC as saying that Bitcoin was “probably rat poison squared.” He has often compared Bitcoin to gold, saying that both have strictly speculative values and don’t produce earnings and dividends the way stocks do.

Bill Gates, Microsoft co-founder, also said that, “As an asset class, you’re not producing anything and so you shouldn’t expect it to go up. It’s kind of a pure ‘greater fool theory’ type of investment.” He then followed by stating, “I agree I would short it if there was an easy way to do it.”

“Certainly Nasdaq would consider becoming a crypto exchange over time.” -Nasdaq CEO Adena Friedman

Ironically, this last week also had some big announcements from Wall Street about the crypto world.

The New York Times just announced that “The parent company of the New York Stock Exchange [Intercontinental Exchange, or ICE] has been working on an online trading platform that would allow large investors to buy and hold Bitcoin, according to emails and documents viewed by The New York Times and four people briefed on the effort who asked to remain anonymous because the plans were still confidential.”

The news came shortly after Goldman Sachs executive Rana Yared announced that the company was entering into the cryptocurrency market by launching a Bitcoin trading option because of the growing demand from their investors. At first, they only plan to trade futures contracts linked to Bitcoin’s price but are looking into direct buying and selling of actual tokens at a later time.

Nasdaq CEO Adena Friedman also openly expressed interest. “Certainly Nasdaq would consider becoming a crypto exchange over time,” she said. “I believe that digital currencies will continue to persist, it’s just a matter of how long it will take for that space to mature. Once you look at it and say, ‘do we want to provide a regulated market for this?’ Certainly Nasdaq would consider it.”

Although these big plays were recently announced, some ex-Wall Street investors took interest much earlier. A former trader at Goldman Sachs, Paul Chou, went out on his own and founded a regulated Bitcoin exchange called LedgerX last year.

Chou stated, “The reason we got into crypto was not to partner with a bank, but to replace them. We deal with crypto holders directly in a way that really takes advantage of Bitcoin’s strengths, while avoiding brokers, banks and other institutions that take multiple cuts of the transaction.”

While more and more big investment establishments are planning on entering the cryptocurrency market, it is still too early to know exactly when and how. The technology is evolving quickly while the laws and regulations are still coming together slowly.

Regardless, when some of cryptocurrency’s harshest critics, who happen to also be some of the brightest financial minds on the planet, change their stance and decide to get involved in Bitcoin, it can only make other non-believers second guess their own views.

It is also important to take into account any personal conflicts of interests these voices may have via the threat to their personal investments.

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