Legendary investor Warren Buffett, an outspoken critic of Bitcoin and other cryptocurrencies, slammed Bitcoin once again during Berkshire Hathaway’s annual meeting. Billionaire Buffett, who is the CEO of Berkshire, told the audience that Bitcoin is “probably a rat poison squared.” His long-term friend and partner Charlie Munger also took the opportunity to convey his harsh views about the first cryptocurrency created using distributed ledger technology.
Buffett, also known as the Oracle of Omaha, stated that Bitcoin is not a productive asset like corporate shares or land, and has no intrinsic value. Furthermore, Buffett said demand from investors is the only factor that determines the price that makes it a breeding ground for “charlatans” who are just there to scam and rip off unsuspicious investors.
According to Buffett, investors are trying to get rich by doing something they don’t really understand. He affirmed his previous stance about Bitcoin by saying the cryptocurrency market will have a “bad ending,” once the “euphoria ears off.”
The 94 year old Munger, vice chairman of Berkshire, took a much more tough stance against Bitcoin. Munger said
“I like cryptocurrencies a lot less than you do. To me, it’s just dementia. It’s like somebody else is trading turds and you decide you can’t be left out.”
Earlier this year, Munger had called Bitcoin “totally asinine” and “noxious poison.” He is also of the opinion that only those want easy money invest in cryptocurrencies.
Buffett had criticized Bitcoin numerous times. He recently said that buying Bitcoin or any other cryptocurrency is not investing. Ironically, when Buffett was asked whether he will go short in Bitcoin, he acknowledged that he may get into trouble as he known nothing about cryptocurrencies. He made the following statement at that time
“In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending. If I could buy a five-year put on every one of the cryptocurrencies, I’d be glad to do it but I would never short a dime’s worth.”
Not surprisingly, Munger does not have a good opinion about gold as well. Back in 2010, Munger said “I don’t have the slightest interest in gold. I don’t see how you become rational hoarding gold. Even if it works you’re a jerk.”
According to Munger’s calculations, an investment of $10,000 in the S&P back in 1942 would have yielded $51 million. However, if the same amount had been invested in gold, it would have generated returns of only $400,000.
