Berkshire Hathaway vice president and Warren Buffett’s longtime business partner Charlie Munger advised investors not to buy bitcoin or gold. He believes that cryptocurrency is too volatile to serve well as a medium of exchange. Munger also says he doesn’t know what’s worse between Elon Musk’s Tesla reaching $ 1 trillion in market capitalization or bitcoin reaching $ 50,000.
Billionaire investor Charlie Munger thinks bitcoin is too volatile to be a good medium of exchange
Legendary investor Charlie Munger answered some questions about bitcoin at the Daily Journal Corporation’s annual shareholders’ meeting in Los Angeles on Wednesday. Berkshire Hathaway vice president and Warren Buffett’s longtime business partner is also president of the Daily Journal. He is often known as Warren Buffett’s right-hand man.
The 97-year-old man was never a fan of bitcoin. Previously, he called bitcoin “rat poison” and compared his trade to “shit exchanges” Buffett then called bitcoin “squared rat poison”.
During Wednesday’s meeting, Munger started by explaining why he doesn’t see bitcoin as a future medium of exchange. “I think I don’t know exactly what the future of the banking system is and I don’t think I know how the payment system will evolve. I really think that a well-managed bank is a major contributor to civilization and that the central banks of the world like to control their own banking system and their own money stock, ”he described, elaborating:
I don’t think bitcoin will end up as a medium of exchange for the world. It is very volatile to serve well as a medium of exchange.
“Bitcoin reminds me of what Oscar Wilde said about fox hunting. He said it is the search for the intractable for the unspeakable, ”said Munger.
Munger talks about Tesla vs. Bitcoin
When asked what he considered the craziest, the bitcoin price hitting $ 50,000 or Elon Musk’s electric car company Tesla hitting $ 1 trillion in market capitalization, Munger quoted a quote from famous English writer Samuel Johnson. One of his well-known quotes was “Sir, there is no way to define the precedence point between a louse and a flea”.
Munger replied, “Well, I have the same difficulty that Samuel Johnson once had when he received a similar question”, emphasizing:
I can’t decide the order of precedence between a flea and a louse, and I feel the same about those choices. I do not know what’s worse.
Tesla’s market capitalization is currently at $ 655 billion, after its shares have fallen dramatically since last Friday. Bitcoin’s price has dropped from its biggest rise of more than $ 58K on Sunday to $ 46,073 at the time of writing. Still, cryptocurrency has increased by more than 43% since the beginning of the year, based on data from markets.Bitcoin.com.
In addition, some shareholders asked Munger if his opinion on cryptocurrencies and bitcoin remained the same and whether the Daily Journal would consider bitcoin or any other cryptocurrency to be an asset on its balance sheet, similar to what Tesla did recently. Elon Musk’s electric car company invested $ 1.5 billion in bitcoin in January, prompting many people to ask which other companies will follow their example and maintain some bitcoin cash reserves.
Answering this question, Munger stated: “No, we will not follow Tesla in bitcoin”.
Munger’s advice: don’t buy Bitcoin or gold
Berkshire Hathaway vice president went on to offer some advice on investing in bitcoin and gold. He said:
It is a kind of artificial substitute for gold. And since I never buy gold, I never buy bitcoin, and I recommend that other people follow my practice.
The cryptographic community was quick to comment on Munger’s remarks about bitcoin. Morgan Creek Digital partner Anthony Pompliano said: “Charlie Munger and Warren Buffett haven’t won the S&P 500 in over a decade. Stop asking them about technology. “
Tahinis, the restaurant chain that was among the first companies to convert all of its money into bitcoin, commented: “Charlie Munger in his last interview calls bitcoin a gold-like asset. He’s wrong again. Bitcoin is rat poison for all fiat-based instruments. “
What do you think about Charlie Munger’s view of bitcoin? Let us know in the comments section below.
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