Warren Buffet, Charlie Munger Open Fire at Bitcoin; Is It ‘Stupid and Evil?’

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On Sat­ur­day, Berk­shire Hath­away Chair­man War­ren Buf­fet and vice-chair­man Char­lie Munger spoke at its first in-per­son annu­al meet­ing since 2019, open­ing fire on both Bit­coin and the cur­rent mar­ket, as they believes its turned into a “gam­bling parlor.”

For hours, Buf­fet and Berk­shire Hath­away vice chair­man, Char­lie Munger, answered ques­tions that opened up pandora’s box as to their belief of how bit­coin is any­thing but valuable. 

Buf­fet reit­er­at­ed his skep­ti­cism of bit­coin, stat­ing his unwill­ing­ness to buy it giv­en its lack of utility:

“Whether [bit­coin] goes up or down in the next year, or five or 10 years, I don’t know. But the one thing I’m pret­ty sure of is that it doesn’t pro­duce any­thing. It’s got a mag­ic to it and peo­ple have attached mag­ics to lots of things,” he told CNBC.

Buf­fet con­tin­ued to ratio­nal­ize its lack of tan­gi­ble val­ue, ref­er­enc­ing how assets such as farm­land, apart­ment build­ings, and tra­di­tion­al art – all have what he con­sid­ers to be “more tan­gi­ble val­ue” than bitcoin.

“Assets, to have val­ue, have to deliv­er some­thing to some­body. And there’s only one cur­ren­cy that’s accept­ed. You can come up with all kinds of things. We can put up Berk­shire coins, put up Berk­shire mon­ey but in the end, this is mon­ey,” he said, hold­ing up a $20 bill. “And there’s no rea­son in the world why the Unit­ed States gov­ern­ment … is going to let Berk­shire mon­ey replace theirs.”

Munger: “It’s stupid…and it makes our country look bad”

Munger, on the oth­er hand, was not as polite towards the dig­i­tal asset, call­ing it “stu­pid” and “evil” that he believes makes the coun­try look bad. 

“In my life, I try to avoid things that are stu­pid and evil and make me look bad…and bit­coin does all three.”

“In the first place, it’s stu­pid because it’s still like­ly to go to zero,” he said. “It’s evil because it under­mines the Fed­er­al Reserve System…and third, it makes us look fool­ish com­pared to the Com­mu­nist leader in Chi­na. He was smart enough to ban bit­coin in China.”

Crypto a ‘venereal disease?’

Munger’s blunt­ness on his bit­coin atti­tude is noth­ing new, but the rea­sons behind his aver­sion have evolved. His most recent com­ments reveal his back­ing of the cen­tral bank sys­tem, his belief that bit­coin will crash, and his con­cern about how Amer­i­ca looks com­pared to China.

Look­ing back to 2018, Munger described the “bit­coin craze” as com­plete­ly “asi­nine.”

When ques­tioned about arti­fi­cial intel­li­gence, the nona­ge­nar­i­an said, “I’ve done so well in life by using orga­nized com­mon sense that I nev­er want­ed to get into fields like AI.” 

In Decem­ber 2021, speak­ing at the Sohn Hearts and Minds con­fer­ence in Syd­ney, he said he would “nev­er buy a cryp­tocur­ren­cy, express­ing his dis­in­ter­est in “par­tic­i­pat­ing in these insane booms.”

In 2009, Tes­la CEO and now Twit­ter CEO, Elon Musk, recalled Munger’s pre­dic­tions about how Tes­la would fail. Musk attest­ed to Munger’s point that Tes­la would prob­a­bly go out of busi­ness, but he was will­ing to try regard­less. As of today, Tesla’s mar­ket cap is $902 billion.

It does seem to be working

How­ev­er, Munger did admit that while the asset seems to be work­ing, he just has a dif­fer­ent atti­tude towards it. “I want to make my mon­ey by sell­ing peo­ple things that are good for them, not things that are bad for them.”

Ear­li­er this year, Munger com­pared cryp­tocur­ren­cy to a “vene­re­al dis­ease:”

“I’m proud of the fact that I’ve avoid­ed it. It’s like a vene­re­al dis­ease or some­thing. It’s beyond contempt.” 

This also comes around the same time as Berk­shire Hathaway’s $1 bil­lion invest­ment into Brazil’s Nubank, a pro-cryp­to dig­i­tal bank in which they saw growth poten­tial. The bank offers a bit­coin ETF through its invest­ment arm.

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