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Warren Buffett’s Advice on Fighting Inflation Is Actually Key to Bitcoin’s Success (Opinion)

                                                            Auf dem jährlichen Berkshire-Treffen letzte Woche sträubte sich Warren Buffett weiterhin gegen den geschichtsträchtigen ROI von Bitcoin im letzten Jahrzehnt.  Aber die Investmentlegende gab auch Ratschläge, um die Inflation zu besiegen, was genau Bitcoin so wertvoll macht.

The world of investment news is awash with reactions to Warren Buffett’s recent comments heaping contempt on Bitcoin. The legendary investor took it a step further with his infamous 2018 slur “rat poison squared.”

From the day Buffett made that joke in May 2018 through this weekend, Bitcoin’s price has returned investors about 300% ROI, even as the market capitulated drastically this year from all-time highs last November.

Warren Buffett will not buy all BTC at $25

At Berkshire Hathaway’s 2022 annual shareholder meeting last Saturday, Buffett said he wouldn’t buy all the bitcoin in the world for twenty-five dollars:

“If you told me you owned all the bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it?” I’d have to sell it back to you one way or another. It won’t do any good.”

That’s optimistic anti-Bitcoin endorsement, but later in the live event for a huge audience of Berkshire Hathaway boosters, the old “Oracle of Omaha” offered some advice on how to hedge against inflation in response to a Q&A question.

Ironically, Warren Buffett’s advice on beating inflation is what makes Bitcoin so good. He said in response to a shareholder question on how to invest to beat inflation:

“The best thing you can do is be exceptionally good at something. If you’re the best doctor in town, if you’re the best lawyer in town, if you’re the best, whatever it is… [people] give you something of what they produce in exchange for what you supply.”

Mr. Buffett continued by elaborating his response:

“Whatever abilities you have, they cannot be taken from you. They really can’t be inflated away from you. … So by far the best investment is anything you develop yourself that isn’t taxed at all.”

This is actually the reason why Bitcoin is so successful.

Bitcoin is exceptionally good at doing some very difficult things for banking services and payment transfers, using an open source software program that anyone can download and use to join the network.

Bitcoin is revolutionary in exceptional ways in innovating high-tech software architectures, open-source cloud computing, real-world civilian commercial use cases for deploying strong public-key cryptography, and of course, the ultimate product delivered by these innovations – the Provision of financial services on a public Blockchain with an open source protocol.

Bitcoin is an example of the Oracle of Omaha’s anti-inflation advice

But beyond that, one of the things Bitcoin is intentionally meant to be exceptional at, and has proven exceptional at for 13 years in the market, is beating inflation. The dollar has steadily depreciated since 2009.

Check out this chart of the US dollar inflation rate and the bitcoin price (the level of the S&P 500-index is given for reference). The correlation is visually evident at a glance.

It is as if the Bitcoin price is propelling the US dollar inflation rate to its new highs over the past year and a half since late 2019, just before the current dollar crisis began.
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And the dollar, too, has depreciated suddenly and rapidly since 2020 following a series of emergency fiscal and monetary measures taken by lawmakers and central banks on an unprecedented scale in history.

That’s what prompted the Berkshire shareholder to ask how to fight inflation. That question has been echoing through financial markets and hedge funds this year.

It’s a wonder, then, that Warren Buffett and his longtime business partner, Charlie Munger, don’t see the value in Bitcoin.

By their own humble and sane principles and standards of value, by their own very sane and worldly advice to Berkshire shareholders — advice that has helped them beat the stock market in a legendary career that has made Warren Buffett America’s richest man many years – bitcoin fits right in.

Source: Crypto News Deutsch

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