Financial news

Bitcoin and cryptocurrencies ‘will come to bad end’, says Warren Buffett

Billionaire investor Warren Buffett said Wednesday that he would never invest in Bitcoin or other cryptocurrencies, and predicted the wildly popular assets are in for a fall.

“I can say almost with certainty that cryptocurrencies will come to a bad end,” Buffett told.

Buffett’s comments were backed by Charlie Munger, his longtime partner at his investment company Berkshire Hathaway, who described the soaring values of Bitcoin and the other cryptocurrencies as “bubbles”. Munger said investors “are excited because things are going up at the moment and it sounds vaguely modern. But I’m not excited.”

Buffett’s comments came as the 87-year-old announced he had appointed two potential successors: Gregory Abel, the chief executive of Berkshire Hathaway Energy, and Ajit Jain, Berkshire’s reinsurance chief.

The critique from two of the world’s most successful investors comes as more companies are piling into cryptocurrencies. On Tuesday Kodak announced that it would launch its own cryptocurrency, KodakCoin, in a move that doubled the struggling company’s share price.

Kodak, which emerged from bankruptcy in 2012 and has struggled to regain its footing ever since, said the move would allow photographers payment for licensing their work using KodakCoin.

The cryptocurrency halo has been good for other companies too. Last month, shares in a tiny US soft drinks company quadrupled after it changed its namefrom Long Island Iced Tea Corp to Long Blockchain Corporation – referencing the ledger technology upon which bitcoin and other cryptocurrency transactions are based.

The company said it planned to raise $8.4m in a stock offering and use some of the cash to invest in bitcoin mining machines. This week it announced it is scrapping the stock sale but still plans to buy the machines. However, it did not specify how it would pay for them.