What Investment Gurus Think of Cryptocurrencies

Cryptocurrency has been in the headlines on a daily basis for months, if not years now. It has captured the attention of users as both a means to pay for goods and services as well as a means of investment. Currently, talks of creating crypto-exchanges are being debated, and the ability to buy and sell cryptocurrencies is expected to get easier when apps such as Robinhood support trading for little to no fees.

While the coverage of cryptocurrencies is vast and thousands of people have shared their success stories making substantial gains in their portfolios, coverage from seasoned and successful investors is arguably less positive. Below are quotes from a few notable investment Gurus offering insights of what they think of this latest phenomenon.

Warren Buffet

1. “Stay away from it. It’s a mirage, basically … It’s a method of transmitting money. It’s a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money, too. Are checks worth a whole lot of money just because they can transmit money? Are money orders? You can transmit money by money orders. People do it. I hope Bitcoin becomes a better way of doing it, but you can replicate it a bunch of different ways and it will be. The idea that it has some huge intrinsic value is just a joke in my view.” – March 14, 2014
2. “It’s not a currency. It does not meet the test for a currency. It's not a currency. I wouldn't be surprised if it wasn't around in the next 10-20 years … People say, ‘Well, I’ll sell you goods in Bitcoins,’ but they change the price of those every time the price of the dollar changes in relation to Bitcoin. They’re pricing off the dollar. They could say, ‘Well, I’ll sell it to you in barrels of oil,’ but if every time the price of oil changes they change the number of barrels, your oil is not the currency.”–Â Feb. 27, 2014
3. "In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending." –Â Jan. 10, 2018
4. “We don't own any, we're not short any, we'll never have a position in them.” – Jan. 10, 2018

Charlie Munger (Trades, Portfolio)

1. “I never considered for one second having anything to do with it. I detested it the moment it was raised. It’s just disgusting. Bitcoin is noxious poison.” – Feb. 14, 2018
2. “Our government’s more lax approach to it is wrong. The right answer to something like that is to step on it hard.” – Feb. 14, 2018
3. “It’s just disgusting that people have been taken in by this.” –Â Feb. 14, 2018
4. “Everyone wants easy money.” – Feb. 14, 2018

Jamie Dimon (JPMorgan chairman and CEO)

1. "I could care less what bitcoin trades for, how it trades, why it trades, who trades it ... if you're stupid enough to buy it, you'll pay the price for it one day. I've also told people that it can trade at $100,000 before it trades to zero. Tulip bulbs traded for $75,000 or something like that. The only value of bitcoin is what the other guy will pay for it." – Oct. 13, 2017
2. “The other thing I've always [said] about bitcoin, governments — and this is not a technological statement — governments are going to crush it one day. Governments like to know where the money is, who has it and what you're doing with it, in case you haven't noticed. Right?” – Oct. 13, 2017

Bill Gates (Trades, Portfolio)

1. “Bitcoin is better than currency in that you don't have to be physically in the same place and, of course, for large transactions, currency can get pretty inconvenient. The customers we’re talking about aren’t trying to be anonymous. They are willing to be known. So Bitcoin technology is key and you can add to it or build a similar technology where there’s enough attribution that people feel comfortable. This has nothing to do with terrorism or any type of money laundering." – Oct. 2, 2014
2. “The Government’s ability to find money laundering and tax evasion and terrorist funding is a good thing.” – Feb. 28, 2018
3. “Right now cryptocurrencies are used for buying Fentanyl and other drugs so it is a rare technology that has caused deaths in a fairly direct way. I think the speculative wave around ICOs and cryptocurrencies is super risky for those who go long.” - Feb. 28, 2018

George Soros (Trades, Portfolio)

1. “Cryptocurrency is a misnomer and is a typical bubble, which is always based on some kind of misunderstanding … Bitcoin is not a currency because a currency is supposed to be a stable store of value and the currency that can fluctuate 25% in a day can’t be used for instance to pay wages because wages drop by 25% in a day. It’s a speculation. Based on a misunderstanding.” – Jan. 25, 2018
2. "There’s also as very innovative blockchain technology, which can be used for positive or negative purposes. Currently it’s used mostly for tax evasion and for people and the rulers and dictatorships to build a nest egg abroad." – Jan. 25, 2018

Carl Icahn (Trades, Portfolio)

1. “I got to tell you honestly, I don't understand it. I'm the last guy — I just don't get it” Nov. 30, 2017
2. “If you read history books about all these bubbles, like in Mississippi — where John Law went around selling all this land in Mississippi that was sort of worthless and the French were going crazy giving him all this money. And then one night it all blew up ... to me, this is what this is.” - Nov. 30, 2017

Howard Marks (Trades, Portfolio)

“In my view, digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it.” – July 27, 2017

Seth Klarman (Trades, Portfolio)

When asked if Bitcoin is a “trading sardine,” Seth Klarman (Trades, Portfolio) said “yes.”

"There is the old story about the market craze in sardine trading when the sardines disappeared from their traditional waters in Monterey, California. The commodity traders bid them up and the price of a can of sardines soared. One day a buyer decided to treat himself to an expensive meal and actually opened a can and started eating. He immediately became ill and told the seller the sardines were no good. The seller said, 'You don't understand. These are not eating sardines, they are trading sardines.'” – Dec. 15, 2017

Stanley Druckenmiller (Trades, Portfolio)

“You see what is going on with bitcoin. I don't own any. Obviously, as a trader I should ... but I only trade what I know … Bitcoin is like anything else. It's worth what people are willing to pay for it … That's what it is worth … What I do know about bitcoin is, the concept it could ever be a medium of exchange has been eliminated because you can't do transactions, particularly retail transactions, with this kind of volatility.” – Dec. 14, 2017

Disclosure: I do not have positions in any cryptocurrencies.