Warren Buffett warns more banks 'will go bust,' calls Bitcoin a 'gambling token' as prices surge above $30k - Kitco NEWS

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(Kitco News) More banks "will go bust," but people should not worry about the safety of U.S. bank deposits, said Warren Buffett, the billionaire chairman of Berkshire Hathaway.

"People shouldn't be worried about losing their money and their deposits they have in an American bank, but the message has gotten very confused," Buffett told CNBC Wednesday. "The costs of the [Federal Deposit Insurance Corp.] are borne by the banks. Banks have never cost the federal government a dime … Nobody is going to lose money on a deposit in a U.S. bank."

Buffett pointed out that the current banking turmoil does not resemble the environment that triggered the 2008 global financial crisis.

"You don't need to turn a dumb decision by managers into panicking the whole citizenry of the United States about something they don't need to be panicked about," he said. "They haven't made the same sort of mistakes that they made back in 2008 or '09, but they have mismanaged assets and liabilities and bankers have been tempted to do that forever, and then it bites them in a big way."

When talking about inflation and how the U.S. is doing, Buffett noted that "extreme inflation is always a possibility."

Both inflation and recession "can cause a lot of trouble, and recessions can turn into depressions," he added. "You can disrupt an economy a lot easier than you can put it back together again."

On Bitcoin, which is witnessing a comeback as it surges above $30,000, Buffett said his take on the cryptocurrency has not changed.

"Something like bitcoin, it's a gambling token," Buffett said. "It doesn't have any intrinsic value."

He once again compared buying Bitcoin to gambling. "People love the idea they're going to make more money tomorrow," he said. "We've had an explosion of gambling essentially …The urge to participate in something where it looks like easy money — it's a human instinct that's been unleashed."

In the meantime, Bitcoin has seen a recovery, with prices last at $30,460.39, up 8% in the last seven days.

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