Tags: warren buffett | jamie dimon | bitcoin | buyers beware

Dimon and Buffett: Bitcoin Buyers 'Beware'

By    |   Thursday, 07 June 2018 02:51 PM

Investment gurus Warren Buffett and Jamie Dimon are warning prospective financial gamblers to use caution when it comes to sinking any of their money in the controversial digital currencies.

"I don't want to be a bitcoin spokesman," J.P. Morgan Chase CEO Jamie Dimon told CNBC. "Just beware."

Berkshire Hathaway's Warren Buffett, in the same joint CNBC appearance with Dimon, also urged investors to be very wary.

"I set a high standard. I don't know whether Jamie can top me or not," said Buffett, who at Berkshire's recent 2018 annual shareholder meeting said bitcoin is "probably rat poison squared."

Bitcoin has lost more than half its value since topping $19,000 in mid-December, CNBC reported.

Dimon and Buffett aren't alone in their disdain for cryptocurrencies.

Short seller Jim Chanos, who predicted the fall of Enron Corp., has developed a similar dim view of bitcoin: It would fail in a crisis.

Fiat currencies such as the dollar have advantages when things go awry, because governments can enforce their use and act as lenders of last resort, Chanos said in an interview with the Institute for New Economic Thinking published this week. Digital coins, on the other hand, have no such backing.

“For those who believe that you need to own digital currency as a store of value in the worst-case scenario, that’s exactly the case in which a digital currency will work the least,” Bloomberg cited Chanos as saying. “The last thing I’d want to own is Bitcoin if the grid goes down.”

However, there are some investors swimming against the backlash tide hautning initial coin offerings.

Sales of digital tokens by technology companies this year have already surpassed the record amount raised in all of 2017 even as government officials from China to the U.S. clamp down on offerings and incidents of fraud continue, Bloomberg explained.

Initial coin offerings have raised more than $9 billion this year, compared with less than $4 billion in all of 2017, according to ICO data tracker CoinSchedule. Messaging service Telegram raised $1.7 billion.

“The ICO market is still hot,” Alex Michaelis, co-founder of CoinSchedule, said in an email. “EOS and Telegram have been big successful ICOs this year, albeit not a classic ICO in the sense that Telegram was closed to private investors only, and EOS has been trading in exchanges for a while, which influences the token price.”

The ramp-up is happening even as regulators are tightening oversight of digital tokens. The U.S. Justice Department recently opened a criminal probe into whether traders are manipulating the price of Bitcoin and other digital currencies. China has already banned the sales. The U.S. Securities and Exchange Commission is cracking down on scams and raising questions over whether tokens from ICOs fall under the agency’s scope of regulation.

(Newsmax wire services contributed to this report).

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Investment gurus Warren Buffett and Jamie Dimon are warning prospective financial gamblers to use caution when it comes to sinking any of their money in the controversial digital currencies.
warren buffett, jamie dimon, bitcoin, buyers beware
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2018-51-07
Thursday, 07 June 2018 02:51 PM
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