In a comparison between taking 1% ownership of all the land or apartment buildings in the United States at-value or 100% of the global supply of bitcoin for $25, CEO Warren Buffett said he would never take the bitcoin.
“I have to sell it back to you one way or the other … it isn’t going to do anything,” Buffett said.
“That’s the difference between productive assets and something that depends on someone paying you more than the last guy got,” he added.
Buffett’s argument rests on the idea that an asset must produce value as well as the idea that bitcoin ultimately must compete with the U.S. dollar and other currencies, which he believes will ultimately win out in any head-to-head.
“We can put up Berkshirecoins or put up Berkshire money … but in the end, this is money, and there’s no reason in the world why the United States currency, which people trust more … this is the only thing that’s money,” he argued, adding that anyone who thinks the United States would move away from the dollar to a cryptocurrency is “out of their minds.”
Berkshire Vice Chairman Charlie Munger agreed with his partner’s assessment, though used characteristically blunt terms to present his stance.
“In my life, I try to avoid things that are stupid, and evil, and make me look bad in comparison to someone else, and bitcoin does all three,” Munger said. “In the first place, it’s stupid because it’s very likely to go to zero, and it’s evil because it undermines the Federal Reserve System and national currency system, which we desperately need to maintain its integrity and government control and so on.”
“And third, it makes us look foolish compared to the communist leader in China,” Munger added. “He was smart enough to ban bitcoin in China, and with all our presumed advantages of civilization, we are a lot dumber than the communist leader in China.”
The pair had earlier praised the actions by the Fed to avoid long-lasting economic fallout in 2008 when the housing crisis started.
Throughout Saturday’s Berkshire Hathaway shareholder’s meeting, Buffett and Munger professed a preference for physical assets that provide clear services and benefits, touting their investment in See’s Candies and discussing their heavy investment this year into oil and gas.
Bitcoin is currently worth $38,360.50, having peaked in November 2021 at $64,400.