Why Warren Buffett Is Wrong About Bitcoin, According to Michael Saylor

In a recent conversation with Ryan Rasmussen, Michael Saylor addressed a common critique voiced by legendary investors like Warren Buffett — the idea that Bitcoin has no intrinsic value because it produces no cash flows.

Legendary investor Michael Saylor, known for his strong advocacy for Bitcoin (BTC), has addressed a critique commonly raised by Old Guard investors like Warren Buffett.

In a recent conversation with Ryan Rasmussen, Saylor delved into a point of contention that has sparked ongoing debate within the crypto space.

As inflation began surging in the 1970s, paving the way for a new bull market in crypto assets eight decades later, a common critique of Bitcoin focused on its lack of intrinsic value and cash flows. This view, often attributed to Buffett, stands in contrast to the perspective on traditional capital assets like stocks, bonds, or real estate, which generate cash flows that can be discounted to present value to determine their worth.

However, Saylor believes this view misses the fundamental point. According to Saylor, Bitcoin represents a new form of digital capital and marks a true paradigm shift.

“The Old Guard investors, having made their fortunes in the 20th century with traditional capital, are naturally inclined to view the new in terms of the old. They look at Bitcoin and see an asset that doesn’t generate cash flows in the traditional sense, leading them to conclude that it must have no value,” Saylor said.

“But this perspective fails to recognize that Bitcoin is not a stock, bond, or piece of real estate—it’s an entirely new asset class, much like electricity was a new form of energy that no one had encountered before.”

Transformative technologies throughout history have often been met with initial resistance due to their unfamiliarity. From electricity, radioactivity, and radio waves to antibiotics, lasers, and computers, each of these breakthroughs was initially viewed with skepticism.

As an example, Saylor notes that in 1890, with the nascent stages of the electrical age, it would have been nearly impossible to expect everyone to immediately grasp the vast potential of electricity, which would later illuminate New York City and revolutionize society.

Moreover, the language we use reflects the human instinct to fear the unknown. We get “shocked” by electricity and “burned” by fire. Traditionalists naturally avoid what they don’t understand, preferring safety over risk.

But modern civilization is built on mastering these very forces. New York City thrives because of the energy that flows through its electrical grid, and our planes, trains, and automobiles are powered by the very flames traditionalists warn against.

Engineers didn’t shy away from these volatile forces; they harnessed them and built the engines of modern society. In the same vein, those who engage with Bitcoin will discover its potential to become an engine of growth for corporations and individuals.

Bitcoin carries ten times the energy content of traditional capital assets due to its volatility, which should be understood rather than feared. And for those who do engage with it, they will discover its potential to become an engine of growth.output: Bitcoin offers a new form of energy, much like electricity and combustion did for previous generations.