Warren Buffett’s business partner Charlie Munger called crypto investors “insane” for investing in nothing and said he avoids the crypto industry like an “open sewer.”
Munger made the comments during an interview with the Australian Financial Review.
“I just avoid it as if it were an open sewer, full of malicious organisms. I just totally avoid and recommend everybody else follow my example.”
In May, he also referred to the whole crypto development as “disgusting” and “contrary to the interests of civilization.”
Investment in nothing
The main reason behind Munger’s anti-crypto attitude is a belief that crypto does not represent anything.
According to Munger, cryptocurrencies do not give their holders the right to claim a portion of the profits of a business, unlike traditional stocks. Therefore, it is empty in the background.
Munger said that crypto’s high price is only due to its popularity and scarcity, which are not good reasons to invest in an asset on its own.
“Crypto is an investment in nothing. I regard it as almost insane to buy this stuff or to trade in it.”
Instead, Munger spoke highly of traditional assets and said that the current downfall of the stock market is nothing unusual. He said that interest rates would manifest more volatility, but the stock markets will get back on their feet since they have real-life businesses that back them.
Other critics agree
A few prominent names are firmly against crypto because they argue it does not represent anything. Munger’s business partners Warren Buffett are the most vocal, while Bill Gates and Peter Schiff also share their opinions when asked.
In one of his most recent interviews, Buffett referred to the worthlessness of cryptocurrencies by saying even if he had all the Bitcoin, he wouldn’t do anything with them other than sell them back to someone.
On the other hand, Bill Gates recently criticized NFTs by saying their value was set based on crowd psychology — an argument that echoes the sentiments of Munger and Buffett.
Invitation to crime
Munger also mentioned crypto’s potential to facilitate criminal activities as a reason to dismiss the whole sector. He had previously referred to crypto as “a venereal disease” and a “tool for criminals.”
He said he hated Bitcoin’s success and added:
“I don’t welcome a currency that’s so useful to kidnappers and extortionists and so forth, nor do I like just shuffling out of your extra billions of billions of dollars to somebody who just invented a new financial product out of thin air.”
Munger said anyone who invested in cryptocurrencies is either evil, looking to exercise fraudulent activities with ease, or delusional investors who can’t see the fact they’re investing in nothing.