Here's What Berkshire's Warren Buffett Thinks About Cryptocurrencies

Berkshire Hathaway (BRKB) CEO Warren Buffett believes the euphoria over bitcoin won't end well for investors - but he's not about to short bitcoin futures either.

[ibd-display-video id=3017249 width=50 float=left autostart=true] The "Oracle of Omaha" shared those views Wednesday after Eastman Kodak ( KODK ) and Helios and Matheson Analytics ( HMNY ) became the latest companies join the cryptocurrency wave.

""In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending," Buffett said in a CNBC interview, during which he also dropped a clue about his potential successor .

Buffett's longtime partner and right-hand man Charles Munger, also on CNBC, compared the Bitcoin frenzy to the dot-com bubble in 2000 .

But while Buffett would buying a put option, considered a bearish hedge, on new digital coins, he stopped short of saying he would make an outright bet that they would fall.

"If I could buy a five-year put on every one of the cryptocurrencies, I'd be glad to do it. But I would never short a dime's worth," he added, saying "Why in the world should I take a long or short position in something I don't know anything about?"

The spot price of Bitcoin was up 0.4% at $14,496, according to CoinDesk , while futures were down 2% at $14,460 on CME Group ( CME ) and 2% at $14,490 on Cboe Global Markets ( CBOE ). Among other cryptocurrencies, Ethereum jumped 11% and Ripple lost 11% vs. 24 hours ago, according to CoinMarketCap .

Berkshire's class B shares were up 1% on the stock market today . Kodak shares surged 53% after more than doubling Tuesday, when became the latest company to pivot to blockchain . MoviePass majority owner Helios and Matheson jumped 18% Wednesday after telling Yahoo Finance late Tuesday it is considering an initial coin offering and the use of blockchain technology.

Among other crypto-related stocks, Overstock ( OSTK ) added nearly 2%, Riot Blockchain (RIOT) gave up 3%, and Long Blockchain (LBCC) lost 4%.

IBD'S TAKE : It is crucial for investors to understand the difference between cryptocurrencies, like Bitcoin, and the blockchain software programs that enable them. It is also important to get a feel for just how speculative digital monies like Bitcoin are right now before investing directly in the currencies or through related exchange traded funds or stocks.

Also on Wednesday, Morgan Stanley sent a note to clients suggesting cryptocurrencies could eventually boost the utility sector if electricity consumption from bitcoin mining continues to grow into 2019 and beyond.

Bitcoin power demand in 2018 could be as great as projected electric-vehicle power demand in 2025, Morgan Stanley equity analyst Nicholas Ashworth wrote. But, he cautioned, bitcoin power is still small on an absolute basis and will not likely have a material impact on utility stocks any time soon.

"That said, mining is very profitable at today's bitcoin price, and if cryptocurrencies continue to appreciate we expect global mining power consumption to increase," he added. By his calculation, the cost of creating a Bitcoin ranges from $3,000 to $7,000 per Bitcoin for electricity and machine.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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