Warren Buffett and Charlie Munger doubled down on their criticism of bitcoin at Berkshire Hathaway’s annual shareholders meeting Saturday, while crypto enthusiasts appear unswayed.
Buffett, Berkshire’s
BRK.A,
-1.28%
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-2.78%
chairman and chief executive, reiterated his view that bitcoin is not a productive asset and is not linked with anything tangible. “Whether it goes up or down in the next year, or 5 or 10 years, I don’t know. But the one thing I’m pretty sure of is that it doesn’t produce anything,” Buffett said.
Buffett said he would pay $25 billion to own 1% of all farmlands in the U.S., or another $25 billion for 1% of all apartments and houses in the country. But “if you told me you own all of the bitcoin in the world and you offered it to me for $25, I wouldn’t take it, because what would I do with it? I’d have to sell it back to you one way or another. It isn’t going to do anything,” Buffett said.
Munger went further on criticizing the asset. “In my life, I try and avoid things that are stupid, evil and make me look bad in comparison to somebody else…and bitcoin does all three,” he said.
Munger said bitcoin was stupid because it was likely to go to zero, evil because it undermines the role of the Federal Reserve and the financial system, and makes the U.S. look foolish “relative to the communist leader of China” who effectively moved to ban bitcoin.
The pair’s past criticism has attracted barbs from crypto enthusiasts, with venture capitalist Peter Thiel recently calling Buffett an “enemy” of the digital asset and part of a “financial gerontocracy” working to undermine bitcoin’s adoption.
Buffett’s and Munger’s views are “understandable from their perspective,” said Eric Chen, co-founder and chief executive at Injective Labs, core contributor to decentralized exchange protocol Injective. “After all, they’re not exactly the most technology-forward investors in the space, and they’ve certainly lived on most of the growth strategies based on the traditional approach when it comes to investing,” Chen said in an interview.
“As a matter of fact, I think that goes more towards the affirmation that the space is really disrupting something,” according to Chen. “From their understanding of the financial market and financial infrastructure overall, fiat currencies, especially the dollar, is probably what they base everything on.”
Chen also argued that the crypto ecosystem is much broader than bitcoin. “Blockchain technology overall provides a lot of fundamental infrastructure to build things on. It’s not just any type of investable assets but it’s also known with a lot of amazing utilities,” Chen said.
David Tawil, president and co-founder of crypto asset fund ProChain Capital, compared Buffett’s view on bitcoin to his reluctant embrace of tech stocks. It took Buffett “decades before they decided to go ahead and invest in Apple,” Tawil said. Berkshire Hathaway Inc. started investing in Apple Inc.
AAPL,
+0.20%
in 2016, while it stood as the investment company’s largest holding as of the end of first quarter.
A representative of Berkshire Hathaway didn’t immediately respond to a request for comment.
Though bitcoin plunged to as low as $37,438 on Saturday, the lowest level since early March, Tawil does not believe it has much to do with remarks by Buffett and Munger, which were largely a reiteration of their past views. “The people that are listening to them for their comments about bitcoin are people that are never going to invest in bitcoin,” Tawil said.
According to Chen, the drop could be attributed more to macro uncertainties, as investors sell off risky assets while expecting the Federal Reserve to deliver a half-point rate hike on Wednesday.
The Dow Jones Industrial Average
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+0.26%
went up 0.2% Monday afternoon. Bitcoin
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+0.52%
is trading at around $38,449 on Monday, up 1.7% over the past 24 hours, according to CoinDesk data.