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CRYPTOCURRENCY

Billionaire Charlie Munger of Berkshire Hathaway calls for ban on cryptocurrencies like Bitcoin

Berkshire Hathaway’s Charlie Munger says crypto is not currency but “a gambling contract with a nearly 100% edge for the house” and calls on US to ban it.

Update:
Billionaire Charlie Munger wants US to follow China’s lead and ban cryptocurrencies
DADO RUVICREUTERS

Charlie Munger, Vice Chairman of Berkshire Hathaway, laid into cryptocurrencies once again writing in an opinion article in the Wall Street Journal. The crypto-skeptic blames lax regulation that has left gaps allowing for the digital coins to become publicly traded without any governmental pre-approval of disclosures.

This has led to “wretched excess” of promoters buying blocks of cryptocurrency for next to nothing and then selling them to an uninformed public at much higher prices in what amounts to a “gambling contract” that completely favors the house. The billionaire urged the United States to follow China’s “splendid example of uncommon sense” and ban cryptocurrencies.

“Cryptocurrency is not a currency”

The 99-year-old Munger has not shied away from speaking out about cryptocurrency, famously referring to it a type of “venereal disease” and says that it is “a bad combination” of fraud and delusion that’s “good for kidnappers”. He’s singled out Bitcoin in the past calling it “rat poison” and comparing to “child prostitution.”

In his latest disparaging of digital coins he says “A cryptocurrency is not a currency, not a commodity, and not a security. Instead, it’s a gambling contract with a nearly 100% edge for the house, entered into in a country where gambling contracts are traditionally regulated only by states that compete in laxity.”

He called on the US government to “enact a new federal law that prevents this from happening.” He gave two precedents for such “sound action,” one from China and the other 1700s England.

US should follow the lead of England and China

The billionaire credited the banning of all public trading in new common stocks after a speculative trading episode that plunged 1700s England into a “horrible depression.” The roughly 100-year-long prohibition he says allowed the nation to make “by far the biggest national contribution to the march of civilization.” He credits it greatly leading to “both the Enlightenment and the Industrial Revolution” as well as spawning off “a promising little country called the United States.”

The other example of foresight into a ban on trading speculative assets he gives is China’s decision to prohibit cryptocurrency trading and mining in 2021. That’s “because it wisely concluded that they would provide more harm than benefit,” Munger wrote.

Should the US follow through with a ban on cryptocurrencies, the billionaire believes one more thing needs to be done… “Thank the Chinese communist leader for his splendid example of uncommon sense.”

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