Warren Buffett says bitcoin is a 'gambling device' with 'a lot of frauds connected with it'

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Warren Buffett, Chairman and CEO of Berkshire Hathaway.

David A. Grogan | CNBC

Warren Buffett‘s aversion to bitcoin just escalated.

“It’s a gambling device… there’s been a lot of frauds connected with it. There’s been disappearances, so there’s a lot lost on it. Bitcoin hasn’t produced anything,” Buffett told a group of reporters ahead of Berkshire Hathaway‘s annual meeting at the CHI Health Center in Omaha, Nebraska.

“It doesn’t do anything. It just sits there. It’s like a seashell or something, and that is not an investment to me,” he added.

Buffett even compared the cryptocurrency to a button on his jacket.

“I’ll tear off a button here. What I’ll have here is a little token…I’ll offer it to you for $1000, and I’ll see if I can get the price up to $2000 by the end of the day… But the button has one use and it’s a very limited use,” Buffett said.

Buffett had previously called bitcoin “rat poison squared,” and Berkshire’s vice chairman Charlie Munger said trading in cryptocurrencies is “just dementia.” Bitcoin rallied to a six-month high on Friday, rebounding from a steep loss last year.

However, the Oracle of Omaha acknowledged the blockchain technology that bitcoin is built on has some promise.

“Blockchain…is very big, but it didn’t need bitcoin. J.P. Morgan of course came out with their own cryptocurrency, ” Buffett said Saturday.

Asked if Buffett will get involved with blockchain, he said “We are probably doing it indirectly, but no, I wouldn’t be the person to be a big leader in blockchain.”

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