Either Buffett Is Wrong About Bitcoin, or Investors Are About to Get Torched

24/7 Wall St. Key Points:

• Bitcoin’s climb to $100,000 has generated endless debates among proponents and skeptics, like Jamie Dimon and Warren Buffett.
• Questions on the basic mechanics, scalability, and utility of Bitcoin indicate problems outside the currency as a speculative trade.
• Whether Bitcoin turns out to be a historical anomaly like speculative bubbles like the tulip mania or a core financial technology remains to be seen.
• 2024 was a good year for Bitcoin, but 2025 could be even better for the next Nvidia stocks. Click here to learn more.

Watch the Video

Transcript:

[00:00:00] Douglas McIntyre: Bitcoin hit a hundred thousand dollars. It’s an extraordinary increase. I mean, it’s, it’s wild how much it’s gone up this year. So you have, you have a lot, a lot of schools of thought, but there are basically two. One is, is that in certain parts of the economy, in the future, Bitcoin will be the currency, okay?

[00:00:22] Douglas McIntyre: That’s the one, that’s the far end the spread of opinion. In which case, it’s forecast that it could be worth several hundred thousand dollars. It could be true, if you believe that’s true. The other view is what I would call the, Jamie Dimon, who’s the chairman of J.P. Morgan (NYSE: JPM), Warren Buffett view. Both of them think that Bitcoin is worthless, and that the only Way you make money on Bitcoin is by selling it to somebody else that you pay one for it and you get two for it.

[00:00:58] Douglas McIntyre: There’s a, they see no inherent commercial value in Bitcoin and believe in, in assets where the performance is different than just being able to buy it and sell it for more down the road. Now I’m not the point that they’re right. That is the sell message is that it’s not a real asset.

[00:01:22] Lee Jackson: Well, and the thing is, the thing that, you know, and you hate to be like, well, the old guys don’t like it because they don’t understand that. Well, it’s like, and I’ll be the first to admit every time I try to get somebody to explain, okay, what are they actually doing when they’re mining bitcoins? What are they doing?

[00:01:39] Lee Jackson: Well, you know they’re trying to solve a complex equation and once they get the equation they get a bitcoin i’m like, okay What’s the equation? Well, it varies and i’m like, okay Okay, if you know, it’s not a fungible You can’t go cash it in anywhere except for a place that accepts bitcoins and gives cash for it I guess and yeah, it’s kind of and the question is and it remains is this the beginning?

[00:02:03] Lee Jackson: And is it going to, you know, a half, half 500, 000, or is this the beginning of the end where slowly, but surely the last people in, you know, get smoked. And, you know, it, it got smoked a couple of years ago and it, you know, it’s had a huge rise since the election, but it was going up all year since say February.

[00:02:25] Lee Jackson: And the thing that really makes me think it’s like the tulip craze of the 1600s is that there’s all these other, you know, like the Dogecoin that came out a couple of years ago that trades at like, you know, one, one thousandth of a cent or whatever it is, there’s the hot to a girl, if you know who that is, you know, she had a digital coin.

[00:02:51] Lee Jackson: And it’s like. What is that? Is that an asset? I mean, and you know, you can look at and you could look above it and say, well, he didn’t like gold either. And gold is almost 3000. So it doesn’t mean that, that he and diamond are right, but they are certainly ones that are trying to see into the future. Like how is it a functional part of the financial future?

[00:03:13] Douglas McIntyre: I think for people looking at Bitcoin, who may, may already be in it, particularly through an ETF, you’ve got to ask yourself a simple question. Is it the currency of the future or is the chairman of the largest bank in the United States and the greatest investor in history? Are they right now?

[00:03:32] Douglas McIntyre: You just said old people, both of them are old. But I also think that they’re smart. I think that they under, I think they understand Bitcoin as well as anybody.

[00:03:40] Lee Jackson: Well, diamonds are aged, so we don’t want to consider that all. But you know, he’s not 94 like Buffett, but yeah, it’s, you would certainly think that both of those two guys are trying to see how it fits into the future in what way does it fit into the future? I mean, there was people, I mean, And, you know, younger viewers and those that haven’t been around, there were people that questioned the validity of the internet 25 years ago.

[00:04:06] Lee Jackson: They’re like, well, the internet’s never going to work. Nobody’s going to give a damn and blah, blah, blah. Well, they were wrong. And, you know, there was a time when Amazon (NASDAQ: AMZN) was 2. There was a time when Apple (NASDAQ: AAPL) was 2, you know, and so there’s always people questioning, but at least with the Internet 25 years ago, you could at least get an idea of the value of it and you could, you can see something on it, albeit slow, you know, with dial up and all that that was, but, you know, this is a, this is a probably different kettle of fish and it’s going to be interesting to see how it plays out over the next five, ten years.