'Rat poison, will go to zero,' Charlie Munger's criticism of cryptocurrencies through the years

Charlie Munger, esteemed investor and the vice chairman of Warren Buffet-led Berkshire Hathaway group, passed away at 99 on November 28, Tuesday. Munger was celebrated for his successful investments, and was also known for his strong views against cryptocurrencies and Bitcoin.

Munger’s criticism of Bitcoin centered around its high volatility and the absence of regulatory frameworks. He described Bitcoin as “disgusting” and “contrary to the interests of civilization.”

Criticism of crypto

He once said, “I think I should say modestly that the whole damn development is disgusting and contrary to the interests of civilization.”

Moreover, the investor was concerned about cryptocurrency’s use in criminal activities, such as drug dealing, terror funding, kidnapping and extortion.

“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,” he once said.

'Will go to zero'

He believed that the cryptocurrencies, along with Bitcoin, are likely to go to zero and have no value. He said, "In my life, I try to avoid things that are stupid, and evil, and maybe look bad in comparison with somebody else. Bitcoin does all three."

"It's stupid because it's very likely to go to zero; it's evil because it undermines the Federal Reserve system, and third, it makes us look foolish compared to the communist leader in China. Jinping was smart enough to ban Bitcoin in China, we are a lot dumber," he added.

In 2013,  he equated Bitcoin to rat poison. "I think it's rat poison," he said. Bitcoin was worth $150 that year. Five years later, when Bitcoin was trading at $9,000, he was asked to revisit his comments. He said, "So it's more expensive rat poison."

Recognizing the growth and interest

Although critical of cryptocurrencies like Bitcoin, he did recognise the interest and growth in the virtual digital asset.

During a Q&A at Berkshire Hathaway's annual shareholder meeting, he said, “Of course, I hate the Bitcoin success.”

Despite his strong criticism, Munger had invested in crypto companies via Berkshire Hathaway. One such investment was Nubank, a leading South American fintech firm offering a range of crypto services. These services include trading platforms for Bitcoin and Ethereum, a Bitcoin ETF product, and a Nubank loyalty token on the Polygon blockchain.