Charlie Munger is the right-hand man of Warren Buffett. He has written a piece about crypto for the Wall Street Journal. One of the most successful investors in the world has described the whole sector as a “gambling contract” and claimed that the house had a 100% advantage over players.
No Winners in Crypto, Says Charlie Munger
This criticism is not unique. Buffett and Munger have long been known for their skepticism about crypto. Both men maintained that Bitcoin and other cryptocurrencies are based on nothing, that they put at risk the investments of those who want to quickly become wealthy without having a solid understanding of the financial sector, and that they can endanger their funds.
Munger, who supported a ban in China on cryptocurrency, now says that the United States should do the same. At this stage, a federal ban is more than just wishful thinking. Although the US is considering more aggressive action against cryptocurrency, it would not be possible due to how deep the ties of institutional and retail investors are to the industry.
The regulator was not influenced by the collapse of FTX, a crypto exchange that was allegedly run like a fiefdom under its founder, Sam Bankman Fried, but by its closer and more thorough regulation.
Even though Munger believes there are no winners in crypto, it is unlikely that the US government will act too antagonistically. President Joe Biden’s administration is actively involved in pushing for a stronger, more collective response at all levels of government. Law enforcement agencies such as the Federal Bureau of Investigation have set up task forces to combat cryptocurrency crime.
Munger isn’t the only investor and banker of the old guard to be critical of the crypto sector. Warren Buffett is his main supporter, and he also runs Berkshire Hathaway. Buffett was a similarly outspoken critic of crypto in recent months. However, he still makes occasional remarks.
Buffett admitted today that crypto is not good, but he doesn’t feel able to stop it from being adopted. Munger might not be able to stop it, but he is more than happy for his opinions to be heard.
