Did Warren Buffett accurately predict the cryptocurrency market crash? Bitcoin, the industry leader, plunged 30% this month and is down 80% since the start of this year. The largest coin is trading around $4,300 at present after hitting a 1-month low of $3,500 last week. Warren Buffett’s crypto prediction has drawn attention as many investors consider his warnings amid the ongoing downturn. His cautious stance seems to resonate with the recent price movements and market sentiment.

The rest of the market is also in the red. The total cryptocurrency market cap plunged $700 billion over the past eleven months.

Source:coinmarketcap.com

The crypto market bulls, who were expecting the market to reach the new high by the end of this year, are now blaming several jittery factors for the selloff. They blame regulators, crypto exchanges, and other technical changes in the selloff of crypto coins.

Warren Buffett’s Prediction Turned True

Warren Buffett is one of the biggest critics of the cryptocurrency market. He has advised investors to avoid crypto markets. The business tycoon claimed that crypto markets could burst anytime because they lack a fair value concept. Buffett also raised serious questions about digital coins’ ability to serve as a medium of exchange and store of value.

Explaining the stance about cryptocurrency markets, Buffett had said, “If you buy something like Bitcoin or some cryptocurrency, you don’t have anything that is producing anything.” In an interview with Yahoo Finance, he also stated, “You’re just hoping the next guy pays more. And you only feel you’ll find the next guy to pay more if he thinks he’s going to find someone that’s going to pay more. You aren’t investing when you do that, you’re speculating.”

Bitcoin Fails to Work as a Medium of Exchange and Store of Value

Warren Buffett’s crypto prediction highlights a key issue in the market today. Bitcoin and the rest of the virtual currencies neither work as a medium of exchange nor store of value despite a lot of hype. This is due to the huge amount of volatility associated with these coins. Crypto markets are historically volatile; they have the potential to gain or lose billions of dollars in a single day alone. The significant price crash and the huge amount of uncertainty associated with digital coins continue to raise questions on how Bitcoin can truly store money.

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