Warren Buffett made headlines in 2018 when be compared bitcoin to "rat poison," urging long-term investors to stay away from a craze-driven bubble that he's sure will eventually collapse. It wasn't, however, the first time he and partner Charlie Munger have been critical of cryptocurrencies.
A few minutes later in the same "Squawk Box" interview, Buffett explained why he thinks some proponents get angry when cryptocurrencies are criticized. As far back as the 2013 annual meeting, Buffett and Munger have their doubts that the then four-year-old digital currency bitcoin would ever be widely adopted. At the time, one bitcoin was valued at around $130.
The following year, Buffett still doesn't see a long-term future for bitcoin. Appearing on CNBC's "Squawk Box" in March, he says he wouldn't be surprised if it doesn't exist after 10 or 20 years. Around that time, the price of one bitcoin ranged between $450 and $700.
A few days later, Buffett was back on "Squawk Box," appearing with Quicken Loans Founder & Chairman Dan Gilbert to promote an NCAA basketball tournament bracket contest they were sponsoring. Gilbert asked Buffett about bitcoin.
Late in 2017, bitcoin topped out a spectacular year-long rally by hitting almost $18,000 on December 15. It then fell sharply from that high. On "Squawk Box" a few weeks later, Buffett was still staying far away from cryptocurrencies.
Just before appearing before thousands of shareholders at the 2018 Berkshire annual meeting on May 5, CNBC's Becky Quick tweeted that Buffett told her bitcoin is "probably rat poison squared," one-upping his partner Charlie Munger who had called it simply "rat poison." Buffett and Munger didn't use those words on stage, but they didn't hold back on their criticism of cryptocurrencies.
Two days later, Buffett was on "Squawk Box" comparing bitcoin to another "non-productive" asset he's been very critical of over the years: gold.
A few minutes later in the same "Squawk Box" interview, Buffett explained why he thinks some proponents get angry when cryptocurrencies are criticized.
When Charlie Munger and Bill Gates join the May 5 "Squawk Box" conversation, bitcoin comes up again. While admitting it's "clever computer science," Munger argues cryptocurrencies are "worthless artificial gold" that facilitates "illicit activity." Gates acknowledges the underlying blockchain technology is a "good thing," but thinks the price gains are being driven by unwarranted speculation.
In June, JPMorgan Chase CEO Jamie Dimon joins Buffett for a CNBC interview on their call for companies to stop issuing short-term earnings forecasts. While noting a few months before that blockchain technology could be useful, Dimon had called bitcoin a "fraud," a comment he later said he regretted. On "Squawk Box," Dimon appeared reluctant to dive into the subject, but did have a short bit of advice.
Several months later, Buffett's opinion hasn't changed at all. In a February "Squawk Box" interview, he calls the idea that bitcoin will have long-term value a "delusion," although he does see potential in the underlying blockchain technology. Buffett concedes he does have sympathy for those who optimists who hoped to change their lives bought bought when enthusiasm, and prices, were high.