2 Stocks to Ride the Crypto Wave
A couple of years ago, Warren Buffett made headlines when he said that bitcoin was "probably rat poison squared." Buffett believes that using dollars to buy cryptocurrency is speculation and not an investment. "Cryptocurrencies basically have no value and they don't produce anything," he said.
Buffett's hostility to crypto is probably based in large part on his shunning of tech stocks in general. Buffett doesn't invest in things he doesn't understand well, and crypto is as hard to understand as any technology (maybe harder). His criticism of crypto is similar to what we might say about gold. It's a rather useless metal with no intrinsic value outside of supply and demand. And yet gold has long been seen as a hedge against inflation. Crypto works the same way.
Indeed, crypto might replace gold as a store of value for people who are dubious about fiat currency. Right now, crypto and gold are similar. It's an asset you hold in the hope that you can trade it in for more money in the future. But unlike gold, it's possible that crypto will actually become a currency in its own right. That is to say, one day we might be able to use crypto to actually buy goods and services. And that's where PayPal Holdings (NASDAQ: PYPL) and Square (NYSE: SQ) come in.
Source Fool.com
