Charlie Munger is no fan of crypto. As vice chairman of the nearly $700 billion megaconglomerate Berkshire Hathaway, Munger has helped Warren Buffett make billions for investors since 1978 using a strict fundamentals-based approach to acquiring “high-quality businesses.”
Partly fraud and partly delusion
And he believes cryptocurrencies represent the opposite strategy, arguing that the entire industry is “partly fraud and partly delusion.” In 2021, Munger famously called the world’s leading digital asset, Bitcoin, “rat poison,” and likened other cryptocurrencies to a type of “venereal disease.” Now he says the federal government should step in and ban the entire industry.
“A cryptocurrency is not a currency, not a commodity, and not a security,” Munger argued in a Wednesday Wall Street Journal op-ed. “Instead, it’s a gambling contract with a nearly 100% edge for the house… Obviously the U.S. should now enact a new federal law that prevents this from happening.”
Munge said that cryptocurrency investors are being taken advantage of by promoters and founders, noting that the creators of new cryptocurrencies often receive coins for “almost nothing.”
“After which the public buys in at much higher prices without fully understanding the pre-dilution in favor of the promoter,” he claimed, calling it an example of “wild and woolly capitalism.”
Munger said the U.S. should follow the example of China—which famously banned cryptocurrencies in 2021—and pass laws that prevent both crypto trading and the formation of new cryptocurrencies.
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Source: Fortune
