Charlie Munger Slams 'Stupid' and 'Evil' Bitcoin, Says Communist China's Leader Was Right to Ban It During Berkshire Hathaway's annual shareholders meeting, Munger and Warren Buffett ripped into the cryptocurrency.
It's no secret that Berkshire Hathaway and its owner/CEO Warren Buffett aren't ardent backers of Bitcoin; just a few years ago, the billionaire investor referred to the cryptocurrency as "rat poison squared." But at the conglomerate's annual shareholders meeting on Saturday, Buffett gave the most comprehensive reason yet for his distrust of Bitcoin, and vice chairman Charlie Munger had some choice words for it too, CNBC reports.
Despite a rocky market in recent months, Bitcoin and other cryptocurrencies remain attractive to some investors. But Buffett said that Bitcoin isn't a productive asset, as it doesn't produce anything tangible. Although he couldn't say for sure if Bitcoin would be up or down in a decade's time, he did note its appeal, saying, "It's got a magic to it, and people have attached magic to lots of things."
Bitcoin's staunchest advocates generally consider the cryptocurrency a passive asset to be bought and held, hoping its price climbs over time. But some investors have turned to alternative, less mainstream cryptocurrencies that can be used for lending or as collateral. Of course, those coins are highly speculative.
Buffett used a real estate example to explain his stance. "[If] you offer me 1% of all the apartment houses in the country and you want another $25 billion, I'll write you a check, it's very simple," Buffett said. "Now if you told me you own all of the bitcoin in the world and you offered it to me for $25 I wouldn't take it because what would I do with it? I'd have to sell it back to you one way or another. It isn't going to do anything."
At one point, Buffett held up a $20 bill, saying, "There's no reason in the world why the United States government … is going to let Berkshire money replace theirs."
Munger, Buffett's so-called right-hand man, expressed a similar sentiment. "In my life, I try and avoid things that are stupid and evil and make me look bad in comparison to somebody else – and bitcoin does all three," he said. "In the first place, it's stupid because it's still likely to go to zero. 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."
Bitcoin was up nearly 1% this morning, trading at just under $39,000.
Berkshire Hathaway's Class A shares were up 0.15%, trading at more than $485,000.