It seems safe to say that Berkshire Hathaway Inc. Vice Chairman Charlie Munger’s cryptocurrency skepticism hasn’t been softened by the rally in prices for bitcoin and other digital assets.
“ ‘Of course, I hate the bitcoin success and I don’t welcome a currency that’s useful to kidnappers and extortionists, and so forth. Nor do I like just shoveling out a few extra billions and billions of dollars to somebody who just invented a new financial product out of thin air. So I think I should say modestly that I think the whole damn development is disgusting and contrary to the interests of civilization. And I’ll leave the criticism to others.’ ”
Munger’s remarks came in response to a question at Berkshire’s BRK.A, -1.29% BRK.B, -0.95% annual shareholder meeting on Saturday. Munger and Chairman Warren Buffett were asked about their feelings regarding rising cryptocurrency values given Munger’s previous characterization of bitcoin as worthless, “artificial gold.”
Buffett, who over the years has previously described the crypto as “rat poison squared” and a “delusion,” with “no unique value at all,” said he would “dodge” the question, reckoning that the vast majority of investors watching the meeting online were likely bitcoin holders.
“We probably got hundreds of thousand of people watching that own bitcoin, and we probably have two people that are short. So we got a choice of making 400,000 people mad at us and unhappy…or making two people happy, and that’s just a dumb equation,” Buffett joked.
Munger, in contrast, was in no mood to hold back, saying that the question was like waving a “red flag” in front of a bull:
Bitcoin BTCUSD, +0.16%, which is notoriously volatile, has rallied over the past year, topping $60,000 for the first time in March before a pullback that took it briefly below $50,000 earlier this month. The digital asset was trading near $56,700 at midday Sunday, down around 1.7% over the last 24 hours, according to CoinDesk. Bitcoin traded at around $29,000 at the beginning of 2021 and for around $8,000 a year ago.
While this year’s event was the second in a row to be held virtually due to the COVID-19 pandemic, Buffett and Munger tackled a range of queries in a 3 1/2-hour question-and-answer session.
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Many of the questions were specific to Berkshire, with Buffett pushing back against criticism of the company’s sale of its stakes in airlines during the height of the pandemic. Other topics, included rising short-term trading activity by individual investors, the impact of special-purpose acquisition vehicles, or SPACs, on the deal-making environment, signs of inflation in the economy and the morality debate around share buybacks.