“I can say almost with certainty that cryptocurrencies will come to a bad end,” the world’s richest investor said in an interview with CNBC.
Buffett, who is worth tens of billions of dollars accumulated over decades of savvy investments, made these comments a day after JPMorgan & Chase chief executive Jamie Dimon said he regretted calling bitcoin a fraud, referring to comments he made at a banking conference last September.
Yesterday the cryptocurrency opened at $14439.47 (R178629) and rose to a high of $14480.36 before losing $751.17 to sink to a low of $13455.70, according to data from coindesk.com. However, cryptocurrency-friendly investment analysts are confident about Bitcoin predicting that it will reach between $25000 and $40000.
Crypto influencer John McAfee envisions Bitcoin’s price to reach between $500000 and $2million by 2020.
And PayPal’s co-founder Peter Thiel’s Founders Fund bought more than $15m worth of Bitcoins after Bitcoin’s rally in the past year.
In an interview with Business Report, Global Crypto Exchange chief executive Tameez Abramjee said volatility was to be expected.
Bitcoin peaked at $17203.30 on January 6, according to data from coindesk.com and cryptowatchers have predicted Bitcoin’s price to keep fluctuating this year.
Abramjee, who said Bitcoin was more of a commodity than a currency, said: “Cryptocurrency will do to fiat currency what e-mail has done to the postal service.” He expects the currency to peak at around $19000 in the next four weeks.
Bitcoin has taken the investing world by storm, surging to a high of more than $19343.04 on December 16 and created a divide on Wall Street about whether it is a legitimate financial instrument.
One particular group Bitcoin is appealing to is African millennials, according to Bitcoin.com. Other reports state that since the economic and political situation in South Africa citizens started looking to Bitcoin.
The exchange eToro saw a spike in users last March when Finance Minister Pravin Gordhan lost his position.
Bitcoin.com also reported that the recent resignation of Robert Mugabe as Zimbabwe’s president caused Bitcoin prices in Zimbabwe to spike exponentially higher than the global average.
“In South Africa, the number of new users trading Bitcoin through eToro rose by 671percent from January to the end of November last year over the same period in 2016, more than the 574percent overall growth,” said eToro analyst Mati Greenspan.
The head of marketing for digital asset platform Luno, Werner van Rooyen, said: “Thousands of trades are being made by South Africans every week.”
Further, as Bitcoin.com reported a few weeks ago, Mugabe’s resignation has caused BTC prices in Zimbabwe to spike exponentially higher than the global average.
Eric Pichet, a KEDGE professor specialising in macro-economics and monetary policy, said: “Increasingly widely accepted as a means of payment with no bank intermediation and absolutely no fees, Bitcoin has some of the attributes of a headless currency.
“Nevertheless, it has no intrinsic value - not even as a collector’s item, because it is intangible. Nor is it a financial asset like a stock or bond, because it has no returns. Its only investment value lies in the possibility of appreciation bestowed on it by those who hold it.”
The cryptocurrency has surged more than 15 times in value over the past 12 months on the back of enthusiasm from retail investors and launch of Bitcoin futures.
At 6pm Bitcoin was down around 0.13percent at $14420.99.
- BUSINESS REPORT