Berkshire Hathaway vice chairman and longtime business partner of Warren Buffett, Charlie Munger, has advised investors not to buy bitcoin or gold. He believes the cryptocurrency is too volatile to serve as a medium of exchange. Munger also says he doesn’t know which is worse if Elon Musk’s Tesla hits $ 1 trillion in market cap or Bitcoin hits $ 50,000.
Billionaire Charlie Munger thinks Bitcoin is too volatile to be a good medium of exchange
Legendary investor Charlie Munger answered a few questions about Bitcoin at the Daily Journal Corporation’s annual general meeting in Los Angeles on Wednesday. Berkshire Hathaway vice chairman and longtime business partner of Warren Buffett is also the 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 his trading to “trading shit”. Buffett then called Bitcoin “rat poison squared”.
During the meeting on Wednesday, Munger first explained why he does not see Bitcoin as a future medium of exchange. “I don’t think I know exactly what the future of banking will be, and I don’t think I know how the payment system will develop. I think that a properly run bank makes a great contribution to civilization and that the world’s central banks like to control their own banking system and their own money supply, ”he said, explaining:
I don’t think Bitcoin will be the medium of exchange for the world. It is too volatile to be used as a medium of exchange.
“Bitcoin reminds me of what Oscar Wilde said about fox hunting. He said it was striving for the inedible through the unspeakable, ”Munger continued.
Munger talks about Tesla vs. Bitcoin
When asked what he thought was crazier, whether the price of Bitcoin hit $ 50,000 or Elon Musk’s electric car company Tesla hit a market cap of $ 1 trillion, Munger referred to a quote from famous English writer Samuel Johnson. One of his famous quotes was: “Sir, there is no way to prioritize between a louse and a flea.”
Munger replied, “Well, I have the same trouble as Samuel Johnson when he got a similar question,” emphasizing:
I cannot rank between a flea and a louse, and I see those decisions the same way. I don’t know which is worse.
Tesla’s market cap is currently $ 655 billion after its stock fell sharply since last Friday. Bitcoin’s price fell from its all-time high of over $ 58,000 on Sunday to $ 46,073 at the time of writing. Still, the cryptocurrency is up more than 43% since the start of the year, based on data from Markets.Bitcoin.com.
In addition, some shareholders asked Munger if his opinion on cryptocurrencies and bitcoin had stayed the same, and whether the Daily Journal would consider bitcoin or another 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, which led many to wonder which other companies will follow suit and hold some cash reserves in Bitcoin.
To this question, Munger replied, “No, we won’t follow Tesla in Bitcoin.”
Munger’s advice: don’t buy bitcoin or gold
The Berkshire Hathaway vice chairman gave some advice on investing in bitcoin and gold. He said:
It is really some kind of artificial substitute for gold. And since I never buy gold, I never buy bitcoin and recommend others to follow my practice.
The crypto community was quick to comment on Munger’s remarks on Bitcoin. Anthony Pompliano, Partner at Morgan Creek Digital, commented, “Charlie Munger and Warren Buffett haven’t beaten the S&P 500 in over a decade. Stop asking them about technology. “
Tahinis, the restaurant chain that was among the first to convert all of its money into bitcoin, said, “Charlie Munger referred to bitcoin as a gold-like asset in his recent 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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