A “noxious poison,” that’s how the Vice-Chairman of Warren Buffett’s investment firm Berkshire Hathaway recently chose to describe Bitcoin and its related technologies. Seemingly not one to mince words, the number two at the world’s third-largest public company also called the general interest in Cryptocurrencies “totally asinine.” These strong declarations following only a month behind his famous boss’s own statement that Bitcoin “definitely will come to a bad ending.”
Given all this hate towards Cryptocurrencies coming from Berkshire Hathaway, one would reasonably assume the company wanted nothing to do with the technology. That is why it’s strange to consider that one of the largest of Berkshire’s many wholly owned subsidiary companies, BNSF Railway, has just become the first major railroad to join the Blockchain In Transport Alliance.
The alliance has a stated goal of helping member companies apply digital-ledger based technologies to improve efficiency and reduce costs in the freight and logistics space. The groups own information guide states that, “Members of BiTA understand that Blockchain isn’t just an industry disruptor, it’s technology that will revolutionize the way people do business.” The group has also stated its firm belief that “10% of the global GPD will be stored on Blockchain by 2025.” Strange for a company whose owners have called the technology “disgusting”, to join up with a group so obviously for it.
To the many who would argue that Bitcoin is just one result of distributed ledger technology, and thus this link does not make hypocrites out of Berkshire and Mr. Buffet. I would remind them that that at the recent Senate hearing over potential Cryptocurrency regulations, Commodity Futures Trading Commissioner Christopher Giancarlo stated in no uncertain terms that “if there were no Bitcoin, there would be no distributed ledger technology.”
Where is the logic in so harshly trashing the very basis for distributed ledger technology and then investing in it at the same time? This question becomes all the more puzzling when you consider that the move towards Blockchain by BNSF railway is only likely to be imitated by many of Berkshire’s other companies in the months to come, as more and more industries begin to see the distinct advantages of the technology. Does it truly seem likely that the parent company will end up the only one not involved in this sphere, especially given the obvious investment opportunity it represents for the multinational conglomerate that is Berkshire Hathaway?
Given Mr. Buffett’s longstanding history of being a shrewd investor with an eye for the future, his outward disdain of the Blockchain has seemed an almost uncharacteristic reaction on his part thus far. That is why this move towards embracing the technology by one his largest companies might actually be the first hint of what is really going on behind the scenes at Berkshire Hathaway.
Could this powerful company not simply be imitating the same long-term ploy now being performed by their rival Goldman Sachs? Another company whose leaders have recently taken to bashing Crypto at every opportunity, only to even more blatantly double down on investing in the technology. It’s not too unreasonable to assert that Berkshire Hathaway is merely attempting to use its influence to weaken the Cryptocurrency market while the company gets a handle on the technology quietly in the background. Knowing that whenever they are fully prepared, they can then enter the market at rock-bottom prices. After all, once invested in, it won’t be too hard for the company to use its combined immense influence and considerable monetary assets to kick-start the market back up at the very moment it would be most beneficial to them.
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