‘Delusion’ Rampant Among Crypto’s Institutional Investors, Warren Buffett’s Billionaire Confidant Says

Topline

Famed investor Charlie Munger once again condemned cryptocurrencies following last week’s disintegration of crypto exchange FTX, becoming the latest billionaire to lash out at FTX and its founder Sam Bankman-Fried.

Charlie Munger, pictured in 2019, is a long-time crypto bear.

Key Facts

Crypto is “demented” and a “very, very bad thing,” Munger, the long-time vice chairman of Berkshire Hathaway and crypto bear, said in an interview with CNBC aired early Tuesday.

Munger’s comments come four days after the abrupt bankruptcy filing by FTX, once the world’s second-largest crypto exchange and valued at $32 billion.

“Good ideas, carried to wretched excess, become bad ideas,” Munger said about FTX and several other notable crypto institutions going under this year, adding there is a “bad combination” of “partly fraud and partly delusion” in the businesses.

The 98-year-old joins fellow billionaires Mark Cuban and Elon Musk in delivering sharp criticism following the FTX collapse: Cuban called Bankman-Fried “dumb as fuck and greedy,” while Musk said his “bullshit meter was redlining” when he talked to the disgraced former FTX boss earlier this year.

Crucial Quote

“It pains me that in my own country I see people that were once regarded as very reputable people helping these things exist,” Munger told CNBC, a dig at the notable institutions who lost millions in the FTX bankruptcy, including Sequoia Capital, the venture capital giant that invested $200 million in the firm. Munger called investors’ willingness to pile into crypto “totally crazy.”

Key Background

Munger is unwavering in his evaluation of crypto, calling bitcoin “disgusting and contrary to the interests of civilization” last May and a “venereal disease” this February. Bitcoin, which surged over 600% to nearly $70,000 in 2021, is down 65% year-to-date, falling about 20% over the last 10 days as FTX unraveled.

Forbes Valuation

We estimate Munger to be worth $2.3 billion, while his boss, Berkshire Hathaway chairman and CEO Warren Buffett, has a $107.8 billion fortune.

Tangent

Munger, a prolific donor to higher education, came under fire last year after he demanded his multimillion-dollar gift to the University of California, Santa Barbara go to funding the largest dorm in the country in his bizarre vision. The plan, complete with windowless bedrooms to maximize space, caused the architect of the project to quit. Construction has not yet begun on the dorm.