Charlie Munger, the vice chairman of Berkshire Hathaway Inc. (BRK.A), the conglomerate controlled by Warren Buffett, has advised investors to treat bitcoin “like the plague” and stay far away from the volatile cryptocurrency. As bitcoin prices reached nearly $20,000 last week and then plunged through the $12,000 mark before regaining some ground, Buffett’s right-hand man says it’s “the last thing on earth you should think about.” (See also: Bitcoin Price Is Down By 40 Percent In 5 Days.)
“I think it is perfectly asinine to even pause to think about them,” said Munger at a University of Michigan Ross School of Business event. The American investor, businessman, author and philanthropist has a net worth of $1.69 billion, according to Forbes. “It’s bad people, crazy bubble, bad idea, luring people into the concept of easy wealth without much insight or work … Figure out what they are and avoid them like the plague,” he said, speaking to a number of digital currencies. “And one of them is bitcoin … It is total insanity.”
'Bad Things Will Happen'
Munger also explained his take on why bitcoin is in no way a replacement for gold. “You know it is one thing to think gold has some marvelous store of value because man has no way of inventing more gold or getting it very easily, so it has the advantage of rarity. Believe me, man is capable of somehow creating more bitcoin.” He indicated that while it is said that there are rules against creating more of the cryptocurrency, investors shouldn’t believe “them,” and warns that, “when there is enough incentive, bad things will happen.”
The 93-year-old billionaire is the chairman of publisher Daily Journal Corp. (DJCO) and sits on the board of wholesale retailer Costco Wholesale Corp. (COST). The business mogul met his partner at a dinner party in 1958. Before his endeavors with Buffett, the Harvard Law School graduate already had an impressive track record. In the period from 1962 to 1975, his investment partnership posted 20% annual returns, compared to the S&P 500’s 5% gain over the same period. (See also: How Did Charlie Munger Get Rich?)
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