- "I think it is perfectly asinine to even pause to think about them," Munger says.
- "It's bad people, crazy bubble, bad idea, luring people into the concept of easy wealth without much insight or work," Warren Buffett's right-hand man says at a University of Michigan Ross School of Business event.
Warren Buffett's top lieutenant, Charlie Munger, is a bitcoin skeptic.
Munger was asked for his views on cryptocurrencies during a University of Michigan's Ross School of Business event.
"I think it is perfectly asinine to even pause to think about them," Munger said. "It's bad people, crazy bubble, bad idea, luring people into the concept of easy wealth without much insight or work. That's the last thing on Earth you should think about … There's just a whole lot of things that aren't going to work for you. Figure out what they are and avoid them like the plague. And one of them is bitcoin. … It is total insanity."
The interview was posted Wednesday on the business school's YouTube channel. The event was held in Los Angeles on Nov. 30 for the school's alumni. The video has largely gone unnoticed with roughly 7,000 views as of Friday morning.
The 93-year-old billionaire investor further explained why bitcoin is not a replacement for gold:
"You know it is one thing to think gold has some marvelous store of value because man has no way of inventing more gold or getting it very easily, so it has the advantage of rarity. Believe me, man is capable of somehow creating more bitcoin. … They tell you there are rules and they can't do it. Don't believe them. When there is enough incentive, bad things will happen."
Munger isn't the only big name in investing criticizing bitcoin in recent weeks.
Value investing giant Seth Klarman called the digital currency a speculative "trading sardine" last Friday. And DoubleLine Capital CEO Jeffrey Gundlach predicted on Dec. 13 if you bet against bitcoin that day "you'll make money."
The price of bitcoin declined 28 percent to below $12,000 Friday, according to Coinbase. Despite the sharp drop, the digital currency is still up about 1,100 percent this year.
Munger is one of the most celebrated investors in the world and was an essential partner in Buffett's success. Before becoming vice chairman of Berkshire Hathaway, the billionaire had quite the track record himself. From 1962 to 1975 Munger's investment partnership generated 20 percent annual returns versus the S&P 500's 5 percent.