- Charlie Munger criticized the hype, lack of regulation and unfairness of cryptocurrencies.
- Warren Buffett’s right-hand man urged the US government to ban the start-up industry entirely.
- Munger has previously blasted crypto as “rat poison,” a “venereal disease” and an “open sewer.”
Investment icon Charlie Munger has trashed the cryptocurrency industry as speculative, unregulated and predatory, and called on the US to ban it altogether.
Warren Buffett’s business partner and vice chairman of Berkshire Hathaway took aim at the likes of Bitcoin, Ether and Dogecoin in an article titled “Why America Should Ban Crypto” published in the Wall Street Journal on Wednesday.
The 99-year-old billionaire noted that thousands of cryptocurrencies have become publicly traded with little or no government oversight. Some crypto businesses have given away large amounts of virtually free coins to promoters, forcing the public to buy them at much higher prices in return, he said.
Munger lamented the “wild and woolly capitalism” at play. He compared it to the mining industry, where salesmanship is often essential to convince investors to finance the mining of precious metals that may not exist.
“Such a pitiful surplus has continued because there is a gap in regulation,” he said. “Cryptocurrency is not a currency, not a commodity, and not a security. Instead, it’s a gambling contract with an almost 100% house edge.”
“Obviously, the United States now needs to pass a new federal law to prevent this,” Munger added.
The veteran investor pointed to two precedents. The first was the Chinese government, which banned crypto trading in 2021, citing concerns about crime, financial instability and environmental damage. The second was the English Parliament in 1720. was the bubble act that tightened stock trading after the bursting of the South Sea bubble.
Munger suggested that once the US bans crypto, it might consider thanking Chinese leader Xi Jinping for “a great example of common sense.”
Buffett’s right-hand man has been waging a public crusade against crypto for years. He has previously called the industry “part fraud and part delusion.” He also compared crypto to “rat poison,” “venereal disease,” and “an open sewer,” and said he wouldn’t want a crypto executive marrying into his family.
Read more: A real estate investor who has acquired more than 50 properties using the BRRRR method shares his top tips for using the strategy in today’s market, especially as housing prices drop and rents drop across the US.
Comments