Buffett on Bitcoin: 'It's a Mirage, Stay Away'

Image: Buffett on Bitcoin: 'It's a Mirage, Stay Away'

Friday, 14 Mar 2014 10:33 AM

By Dan Weil

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The bitcoin digital currency elicits vastly different reactions from financial experts. Count legendary investor Warren Buffett, CEO of Berkshire Hathaway as a pessimist.

"Stay away from it. It's a mirage basically," he tells CNBC.

The bitcoin has endured a rocky ride in recent weeks, with Mt. Gox, formerly the dominant exchange for the currency, collapsing.

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"It's a method of transmitting money. It's a very effective way of transmitting money," Buffett argues. But he noted that you can transmit money with a check or a money order as well.

"People do it. I hope bitcoin becomes a better way of doing it," he notes. "You can replicate it a bunch of different ways. The idea that it has a huge intrinsic value is a joke."

Basically, he adds, bitcoin "is a very fast money order . . . anonymously."

Campbell Harvey, a professor of international business at Duke University, is more optimistic about the currency. He tells The Christian Science Monitor that top venture capitalists such as Marc Andreessen are backing bitcoin.

The digital currency is in its early phases and has the potential "to be massively disruptive" to the global payment system, Harvey contends. Just like with other new technologies, "there will be some growing pains."

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