Let's state the obvious: Warren Buffett is not a dumb man.

In fact, he's a genius. After all, he didn't earn the moniker "Oracle of Omaha" for nothing. But the 87-year-old CEO of Berkshire Hathaway (BRK.A) - Get Report (BRK.B) - Get Report was raked over the coals on Twitter Inc. (TWTR) - Get Report this week after he said bitcoin will "definitely come to a bad ending."

To all those calling Buffett a dinosaur, a fraud or a failure for deciding to sit bitcoin's ascent out -- take a look in the mirror because you just might be among the dumbest ones on Wall Street.

As soon as Buffett blasted bitcoin, the internet twisted into madness, with the "cryptomaniacs," as TheStreet's founder Jim Cramer calls them, publicly throwing stones at Buffett.

Buffett has some seriously good reasoning for not touching bitcoin: he's not investing because he doesn't know enough about it.

The investing legend operates with a "circle of competence" theory, says Trip Miller, managing partner at Gullane Capital Partners, which holds a long position in Berkshire. That means he stays within the realm of what he knows and doesn't stray from it just to follow a hot trend.

"Buffett is staying away from bitcoin because he is an investor and not a speculator. An investor values an asset and then purchases it if the asset can be acquired for less than intrinsic value," said Robert Johnson, President and CEO of the American College of Financial Services, via email. Johnson also grew up in Omaha, went to school with Buffett's son Peter and has been a Berkshire shareholder and known Warren himself for years.

The Oracle won't regret this decision "in the least," Johnson said. 

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This isn't the first time Buffett has faced such biting criticism. Buffett was subjected to enormous backlash in the 1990s for his decision to stay away from internet stocks. Even then he was criticized as old and outdated. But then the dotcom bubble popped, and Buffett was among those left standing tallest.

He also hasn't invested in Alphabet Inc. (GOOGL) - Get Report  or Amazon.com Inc. (AMZN) - Get Report  . Buffett was also way late to invest in Apple (AAPL) - Get Report . And all of that's okay. Those comparing his bitcoin move to his tech stock decisions are missing the point.

Johnson explained that tech companies are businesses that produce cash flows, unlike the speculative bitcoin that is a mere digital currency. "In essence, they can be valued," Johnson noted. "They're truly businesses," Miller added. "They make products that change peoples' lives."

After investing in Berkshire for nearly his entire adult life, Johnson said he "would have thought [Buffett] had lost his mind" if had he invested in bitcoin.

At the crux of it all is Buffett's investing philosophy: You don't have to swing at every pitch.

"The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot," Johnson said. "And if people are yelling 'swing, you bum,' ignore them. The people yelling at Buffett now to swing at cryptocurrencies should be ignored."

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"You're judged on the things you do better than the things you don't do," Miller said. "I think Berkshire will be around and thriving for a lot longer than those 1,300 cryptocurrencies."

Truth.

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