2023-02-07
Charlie Munger, Vice Chairman of Berkshire Hathaway; in many of his speeches he wants US government to ban cryptocurrencies like China does. In his opinion; cryptocurrencies are not assets, they are not currencies, securities, or
commodities. Cryptocurrencies are speculation. In his view, Bitcoin is worthless
artificial gold created by a clever computer scientist but it doesn’t mean
Bitcoin has any value.
Charlie Munger once said in a shareholder annual meeting of
Berkshire Hathaway that Bitcoin is stupid because it’s very likely to go to
zero. It’s evil because it undermines the federal reserves system and international
currency system which maintain integrity by governments. The US is more stupid
than Chinese government because the Chinese communist party is smart enough to ban
cryptocurrencies in China.
An analysis on the future of crypto
1. Charlie
Munger famous investing theory.
According to a book called Charlie Munger a Complete Investor, in the view of Charlie Munger; a good
investor needs to have broad knowledge. Before judging crypto is good or bad,
people should at least learn about it. The benefit of Bitcoin is that for the
first time in history that blockchain enables humans to transfer value online
without middleman. If you think crypto is bad avoid it; if you think crypto is
good, invest in it with knowledge.
2. Be cautious
about investing in crypto.
Warren Buffett
and Charlie Munger never buy any cryptocurrencies or invest in any crypto
projects. So, they avoid the loss of FTX and LUNC. That’s their benefit of
rejecting crypto. So, invest in crypto carefully.
3. It’s hard to
ban crypto
Chinese
government does it because they are not liberal democracy and decentralized
finance of crypto poses a threat to Chinese financial system controls by
Chinese government. The spirit of the United States is pioneer, crypto is the
new finance frontier that people are seeking to develop many things from blockchain
technology.
4. Crypto will
exist in parallel with centralized finance
When America
was founded Alexander Hamilton, the then Secretary of the Treasury proposed the
federal reserves system for the United States. The federal reserves system proposed by
Hamilton was being opposed for a hundred of years. But today in the US,
everyone accepts Fed. Crypto is the same thing, it needs time to develop cryptocurrency
industry to become a stable and fair financial system, or at least a
well-functioning financial system that can co-exist with government financial
system.
