Cryptocurrency is “crazy, stupid gambling”
Billionaire investor Charlie Munger is not a fan of cryptocurrency.
The Berkshire Hathaway vice chairman called the form of virtual currency “worthless” during Wednesday’s annual shareholder meeting of the Daily Journal Corporation, a publisher where he is a director.
“Sometimes I call it crypto ‘crappo,’ sometimes I call it ‘crypto s—.’ It’s just ridiculous that anyone would buy these things,” Munger, 99, told CNBC’s Becky Quick during a live stream of the event, adding, “It’s absolutely crazy, stupid gambling.”
Cryptocurrency proponents claim that digital assets offer privacy, security, better transaction speeds and lower costs than traditional financial institutions.
But Munger, a longtime stock investor with a net worth of $2.3 billion, isn’t buying it. “I think those who oppose my position are idiots, so I don’t think it’s a rational argument against my position,” he said.
Munger’s comments come amid an avalanche of problems for crypto investors over the past year.
The crypto market lost roughly $2 trillion last year. Bitcoin, one of the most popular cryptocurrencies, lost more than 60% of its value in 2022. And the implosion of FTX, a now-bankrupt crypto trading platform valued at $32 billion, has shaken investor confidence as the industry feels the ripple effects of the company’s collapse.
“A lot of Americans are starting to realize that cryptocurrency is just a speculative craze and the industry is full of crooks,” James Royal, a lead reporter at Bankrate, told CNBC Make It. In fact, only 8% of Americans have a positive view of cryptocurrency as of November, according to the CNBC All-America Economic Survey.
On Wednesday, Munger said he is not proud of his country “for allowing this shit.” He has previously called on the US government to ban cryptocurrencies, and may partially get his wish as the crypto industry faces growing regulatory backlash.
Increased scrutiny of crypto trading firms and investment advisers is among the US Securities and Exchange Commission’s top priorities this year, as outlined in the agency’s “2023 Examination Priorities Report.”
The SEC’s investigations will focus on “the offer, sale, recommendation of, or advice regarding the trading of crypto or crypto-related assets,” the report said.
The agency voted Wednesday to expand federal rules that, if passed into law, could require crypto exchanges to hold their assets with a federally or state-chartered bank to act as a depository for customers’ virtual currency.
The proposal puts crypto firms in a “no-win” scenario, SEC Commissioner Mark Uyeda wrote in a statement Wednesday. US regulators have already warned banks that handling crypto exposes them to a range of risks, including fraud and scams.
“In other words, an adviser can hold crypto assets in a bank, but banks are warned by their regulators not to hold crypto assets,” Uyeda wrote.
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