What is the truth behind Buffett's investment in Bitcoin mining? In fact, it is an investment in gold mining

In the early morning of the 17th Beijing time, a news about Buffett investing in Bitcoin mining went viral in Chinese media, especially in the Chinese mining community. But what is the truth of the matter?

First of all, this is of course not true, because there is no English media or reliable information to confirm this fact. It is just one person's Twitter, and this Twitter only has a dozen comments, but it has gone viral in the Chinese world.

However, there is no smoke without fire. Let’s listen to Wu talk about blockchain.

The source of this tweet is actually because Buffett invested in a gold mining company. On August 14, Buffett's Berkshire Hathaway sold its 26% stake in Wells Fargo and a certain amount of JPMorgan Chase shares, and purchased nearly 21 million shares of Barrick Gold Corporation.

Barrick Gold is the world's largest gold mining company in terms of annual production. It has gold and copper mining operations and projects in 13 countries in North and South America, Africa, Papua New Guinea and Saudi Arabia. It is said that this is Buffett's first investment in gold stocks and the only new position in the second quarter.

It is important to note that there is no evidence that Barrick Gold will enter the Bitcoin mining industry.

On the contrary, as a competitor to Bitcoin, the North American COO of this gold company once said: "Gold is physical. Therefore, no matter what the price is, it will always have value, and its value will not be zero. Cryptocurrency may be zero, and that's the difference."

This seems to represent a change in Buffett’s investment direction. Many media outlets have ridiculed Buffett’s investment in a gold mining company because in Buffett’s past views, gold and Bitcoin are similar things.

According to Bitamp, Buffett has never tried to hide his disdain for gold and Bitcoin, and he does not consider both assets to be investable assets. In his words, they do not produce anything (unlike businesses, farms or real estate); gold has two major flaws, it is neither useful nor productive; Bitcoin has no investment value at all, just like the tulip bubble, it is almost certain to end in tragedy.

However, some overseas cryptocurrency media and celebrities believe that Buffett's purchase of gold mining company stocks will indirectly detonate Bitcoin, although this may be a bit of a traffic-grabbing move.

Cointelegraph reported that because Bitcoin is digital gold and has the same safe-haven value as precious metals, the founder of Heisenberg Capital said that Buffett's move could help boost BTC to $50,000.

The logic is that Buffett has changed his consistent attitude and started to invest in gold, a safe-haven asset. Bitcoin has the same properties as gold, so Bitcoin will soar. Since Buffett has changed his view on gold and invested in gold mining, will he invest in Bitcoin mining one day? This is the "beautiful expectation" of the Twitter user. (This is his next Twitter)

Unfortunately, this expectation is not very tenable. It mainly highlights the desire of people in the cryptocurrency circle to be "favored" by traditional industries, which is somewhat similar to the previous incident involving Harry Potter author Rowling.

First of all, Buffett's investment in the company is 564 million US dollars, which is not a large amount for him. It does not represent any change in values, and it will not have much impact on the market. The prices of gold and Bitcoin have not fluctuated significantly in recent days. Secondly, there are different opinions on the correlation between gold and Bitcoin. Bitcoin has a safe-haven attribute, but its speculative attribute is stronger. Finally, compared with the stable market of gold, Bitcoin and other cryptocurrencies are still a very small and developing market. At present, given Buffett's conservative style, it is unlikely that he will invest in cryptocurrencies in his lifetime.

The Chinese cryptocurrency world's attention to Buffett is mainly because Sun Yuchen won the bid for Buffett's lunch. Sun Yuchen, who has strong marketing skills, gave Buffett a bitcoin. Sun Yuchen told Buffett that Bitcoin will be the universal currency for the next generation. But Buffett said: "I am sure my grandchildren would prefer to inherit my wealth in US dollars."

However, judging from overseas media reports, it is not just that we love to hype. To some extent, foreigners in the cryptocurrency circle are better at shouting orders than Chinese people.