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Buffett blasts bitcoin as 'mirage': 'Stay away!'

Warren Buffett is no fan of bitcoin.

"Stay away from it. It's a mirage, basically," he said on CNBC's "Squawk Box" on Friday.

(Read more: Buffett: It would surprise me if stock prices drop 50%)

In response to a question about the cryptocurrency from Quicken Loans founder Dan Gilbert, Buffett said:

"It's a method of transmitting money. It's a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money, too. Are checks worth a whole lot of money just because they can transmit money? Are money orders? You can transmit money by money orders. People do it. I hope bitcoin becomes a better way of doing it, but you can replicate it a bunch of different ways and it will be. The idea that it has some huge intrinsic value is just a joke in my view."

One prominent investor, venture capitalist Marc Andreessen, took a shot at Buffett for his comments.

Buffett and Gilbert were on "Squawk Box" to promote the "Quicken Loans Billion Dollar Bracket Challenge with Yahoo Sports" in which anyone who correctly predicts the outcome of every game in the NCAA basketball tournament will win $1 billion. The prize money is insured by Buffett's Berkshire Hathaway.

—By CNBC's Alex Crippen. Follow him on Twitter: @alexcrippen