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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Source: https://beincrypto.com/warren-buffet-charlie-munger-blast-bitcoin-for-lack-of-utility/