Berkshire Hathaway’s vice chairman and Warren Buffett’s longtime business partner, Charlie Munger, advised investors not to buy bitcoin or gold. He believes the crypto-currency is too volatile to be able to serve well as a medium of exchange. Munger also says he does not know what is worse between Elon Musk’s Tesla reaching $ 1 trillion in market capitalization or bitcoin earning $ 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 annual meeting of shareholders of the Daily Journal Corporation in Los Angeles on Wednesday. The vice president of Berkshire Hathaway and Warren Buffett’s longtime business partner is also chairman of the Daily Journal. He is often known as Warren Buffett’s right hand man.
The 97-year-old has never been a fan of bitcoin. He previously called bitcoin ‘rat poison’ and compared its trading to ‘trading props’. Buffett then calls bitcoin ‘rat poison in the square’.
During Wednesday’s meeting, Munger began to explain why he does not see bitcoin as a future medium of exchange. ‘I do not think I know exactly what the future of banking is, and I do not think I know how the payment system will develop. I do think that a well-run bank makes a major contribution to civilization and that the central banks of the world would like to control their own banking system and their own money supply, ‘he described:
I do not think bitcoin is going to be the medium of exchange for the world. It is too volatile to serve well as a medium of exchange.
‘Bitcoin reminds me of what Oscar Wilde said about fox hunting. He said it was the pursuit of the unplayed by the unspeakable, ‘Munger added.
Munger talks about Tesla versus Bitcoin
When asked what he thinks is crazier, the price of bitcoin reaching $ 50,000 or Elon Musk’s electric car company, Tesla, $ 1 trillion in market value, Munger refers to a quote by well-known English author Samuel Johnson. One of his famous quotes was “Sir, there is no solution to the priority between a louse and a flea.”
Munger replied, “Well, I have the same problems that Samuel Johnson once had when he was asked a similar question,” emphasizing:
I can not decide on the order of preference between a flea and a lice, and I feel the same way about the choices. I do not know what is worse.
Tesla’s market capitalization currently stands at $ 655 billion after the share has fallen sharply since last Friday. Bitcoin’s price has fallen from an everyday high of more than $ 58,000 to $ 46,073 at the moment. However, the cryptocurrency has risen by more than 43% since the beginning of the year based on market data.Bitcoin.com.
In addition, some shareholders asked Munger if his opinion on cryptocurrencies and bitcoin remained the same, and the Daily Journal would consider bitcoin or any other cryptocurrency as an asset on its balance sheet, similar to what Tesla recently did. Elon Musk’s electric car company invested $ 1.5 billion in bitcoin in January, prompting many people to ask which other companies will follow its example and hold some cash reserves in bitcoin.
On this question, Munger confirmed: “No, we will not follow Tesla in bitcoin.”
Munger’s advice: Do not buy Bitcoin or gold
The deputy chairman of Berkshire Hathaway gave advice on investing in bitcoin and gold. He said:
It really is an artificial substitute for gold. And since I never buy gold, I never buy bitcoin, and I recommend that other people follow my practice.
The crypto community quickly commented on Munger’s comments about bitcoin. Anthony Pompliano, a digital partner from Morgan Creek, says: ‘Charlie Munger and Warren Buffett have been beating the S&P 500 for more than a decade. Stop asking them about technology. ”
Tahinis, the restaurant chain that was among the first companies to convert all of its cash into bitcoin, said: ‘Charlie Munger calls bitcoin a golden asset in his latest interview. He’s wrong again. Bitcoin is rat poison for all fiat-based instruments. ”
What do you think of Charlie Munger’s view of bitcoin? Let us know in the comments below.
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