At Berkshire Hathaway's (BRK.A -0.34%) (BRK.B -0.01%) annual meeting, Warren Buffett reiterated that bitcoin and other cryptocurrencies are likely to come to a bad ending, and he and his right-hand man Charlie Munger had several not-so-nice things to say about this new asset class.

In this Industry Focus: Financials clip, Michael Douglass and Matt Frankel give a rundown of the highlights of the two investors' crypto comments.

A full transcript follows the video.

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This video was recorded on May 7, 2018.

Michael Douglass: Speaking of stock ideas, or, well, actually, things to stay away from, so, the opposite of stock ideas -- let's talk about cryptocurrencies! Warren Buffett, sometimes I wonder if he thinks about exactly what he's going to call something if he gets a question about when he knows he's going to get a question about it, because he led off by calling Bitcoin -- tell me if I'm quoting this wrong -- "rat poison squared."

Matt Frankel: Yes. [laughs] That's very true. He had things to say about cryptocurrencies over the past few months, and this wasn't really surprising. He's said before, and he said again, that these are going to end badly. His reasoning is that these are not productive assets in the sense that, if you buy a stock, it generates profits, hopefully. If you buy a farm, it produces crops. These are productive assets. Whereas, gold is the classic example of an unproductive asset.

Buffett, and Munger, for that matter, both feel that cryptocurrencies are a fool's gold, in a way. They haven't really dug into how useful they are as actual currencies. Not surprisingly. I don't really think Warren Buffett goes out and pays for things in Bitcoin. [laughs] He's speaking strictly from an investment standpoint. It's probably fair to say he feels pretty much the same as he does about foreign currencies. That's why Berkshire doesn't hold $20 billion in euros in its portfolio. It's not a productive asset. He feels that people could put their money to use in better ways. And it's kind of turning into a bubble, almost.

Douglass: Yeah. It's one of those things where, this is the difference between investing and speculation, I think, in a really core kind of way. Speculation is when you're saying, "I think this price is going to go up or down." You might think that about currencies, you might think that about soybean futures, you might think that about cryptos. Investing is when you say, "This business looks like it's going to prosper, and I think the rest will probably follow, naturally, from that."

The nice thing about investing is, when everyone is tacking right and you're tacking left, if you're confident in your thesis and you're right, you can make a lot of money. That's really how Warren Buffett has beaten the market by so much, historically. Here at The Motley Fool, it's pretty clear which side of that whole debate we're on. But, if you're ever uncertain about where you stand, I would consider the history here. People who have a really great record of beating the market tend to think this way about long-term investing as opposed to speculation. I think that's a good takeaway for all of us.