The legendary value investor Warren Buffett and his longtime right-hand man at Berkshire Hathaway Charlie Munger have been tearing into bitcoin and other cryptocurrencies ever since their early days. However, even having in mind that Mr. Munger has called bitcoin ‘worthless artificial gold’ and a ‘scum-ball activity’ in the past, his latest comments still sound shocking.
Speaking at Berkshire Hathaway annual shareholder’s meeting, Mr. Buffet laid into bitcoin, comparing it to rat poison before Mr. Munger joined the stage to deliver a memorable rant of his own. Having been asked on digital currencies, he replied that, “I regard the whole thing as a combination of dementia and immorality. I think the people pushing it are a disgrace. There ought to be some things that are beneath you, that you just don’t do, and this is one.”
However, it’s worth remembering that ‘people pushing it’ now include such financial giants as Nasdaq, CME and Goldman Sachs among other institutions. Barclay’s is reportedly on the verge of opening a crypto trading desk in the near future. And it is very likely that an increasing number of institutional investors will continue to enter the crypto industry, especially once the regulatory framework is introduced.
He then went on to attack bitcoin even further, providing a curious example of his outlook on cryptocurrencies, claiming that, “Suppose you could make a lot of money trading freshly harvested baby brains. Would you do it, or would you say that’s immoral? You wouldn’t trade them, would you? It’s too awful a concept. Well, to me Bitcoin is almost as bad.“
However, even such a staunch opponent of the crypto industry has identified at least a single positive – the underlying blockchain technology, on which the digital currencies are built. However, lasted very shortly, as Mr. Munger quickly came back to launch another attack on virtual currencies, saying that, “The computer science behind Bitcoin is a great triumph of the human mind, that’s what’s captivated all these people. They’ve created a product that’s hard to create more of but not impossible … I see an artificial speculative medium … I regard the whole business as anti-social, stupid and immoral.“
Perhaps we should not be surprised that the likes of Mr. Buffet and Mr. Munger (who are 87 and 94 years old respectively) do not fully grasp the significance and scope of virtual currencies. They represent an older generation that made their fortune in the pre-financial crash world, dealing with banking cartels and huge corporations on the way. A decentralized asset class that cannot be manipulated by financial giants holds a truly revolutionary potential for a lot of people but Berkshire heads are not among them.
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