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

Blockonomics
Warren Buffet, Charlie Munger Open Fire at Crypto; Is It “Stupid and Evil?”
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On Saturday, Berkshire Hathaway Chairman Warren Buffett and Vice Chairman Charlie Munger spoke at their first in-person annual meeting since 2019, firing on bitcoin and the current market as they argue Bitcoin has turned into a “casino”.

For hours, Buffett and Berkshire Hathaway vice-chairman Charlie Munger answered Pandora’s box-opening questions about their belief that Bitcoin has no value.

Buffett reiterated his skepticism about Bitcoin, saying he was reluctant to buy it because of its lack of utility:

“regardless [bitcoin] Up or down next year, 5 years or 10 years, I don’t know. But one thing I’m pretty sure about is that it doesn’t produce anything. It has a kind of magic, and people put magic on a lot of things,” he told CNBC.

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Buffett went on to rationalize its lack of tangible value, citing assets such as farmland, apartment buildings and traditional art — all having what he believes to be “more tangible value” than bitcoin.

“For an asset to have value, it has to deliver something to someone. And only one currency is accepted. You can come up with all kinds of things. We can put Berkshire coins, we can put Berkshire money, but Ultimately, it’s money,” he said, holding a $20 bill. “And there is no reason in the world why the U.S. government … would let Berkshire’s money replace theirs.”

Munger: ‘It’s stupid…it makes our country look bad’

Munger, on the other hand, is rude about digital assets, calling them “stupid” and “evil,” which he believes makes the country look bad.

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

“First of all, it’s stupid because it could still go to zero,” he said. “It’s evil because it undermines the Federal Reserve System… Third, it makes us look stupid compared to the Communist Party leader in China. He’s smart enough to ban bitcoin in China.”

Encryption is a “STD?”

Munger’s bluntness about Bitcoin is nothing new, but the reasons behind his disgust have changed. His recent comments reveal his support for the central banking system, his belief in Bitcoin’s collapse, and his concerns about how the U.S. compares to China.

Looking back on 2018, Munger described the “Bitcoin craze” as utterly “stupid.”

When asked about artificial intelligence, the older man said: “I do a good job in life, using organized common sense, and I never wanted to go into a field like artificial intelligence.”

Speaking at the Sohn Hearts and Minds conference in Sydney in December 2021, he said he would “never buy cryptocurrencies, saying he is not interested in “participating in these crazy booms.”

In 2009, Tesla CEO Elon Musk, now the CEO of Twitter, recalled Munger’s predictions about how Tesla would fail. Musk proved Munger’s point that Tesla could fail, but he was willing to try anyway. As of today, Tesla’s market cap is $902 billion.

it does seem to work

However, Munger did admit that while the asset appears to be working, he just takes a different approach to it. “I want to make money by selling people what’s good for them, not what’s bad for them.”

Earlier this year, Munger likened cryptocurrencies to a “venereal disease”:

“I’m proud of myself for avoiding it. Like an STD or something. It’s not to be taken lightly.”

This also coincides with Berkshire Hathaway’s $1 billion investment in Brazil’s Nubank, a cryptocurrency-backed digital bank that they see potential for growth. The bank offers bitcoin ETFs through its investment arm.

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