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- Charlie Munger: Cryptocurrencies Are “Gambling Contracts”
Fiona Simmons February 3, 2023 2 min read
Charlie Munger: Cryptocurrencies Are “Gambling Contracts”
Often seen as a grumpy critic of the crypto sector, the prominent Berkshire Hathaway insider is once again at it, condemning the entire industry and calling for its demise
Charlie Munger, the right-hand of Warren Buffett, has shared his thoughts about crypto in a new piece for the Wall Street Journal. In it, one of the world’s most successful investors has called the entire sector a “gambling contract” and assured that “the house” had a 100% edge on players.
No Winners in Crypto, Says Charlie Munger
His criticism is not new, as Munger and Buffett have been known for their salty attitude towards crypto in general. They have both maintained that cryptocurrencies such as Bitcoin are based on nothing and that they endanger the funds of investors looking to become rich quickly, without a working understanding of the financial industry.
Munger, who previously backed a ban on cryptocurrencies in China, has now said that the United States should follow suit. A federal ban, at this point, though is a little more than wishful thinking. The US has been considering tougher action on cryptocurrency, but a ban would be impossible because of how deeply ties of retail and institutional investors run into the industry.
Not even the collapse of FTX, a beleaguered crypto exchange that was allegedly run as a fiefdom by its founder and former boss, Sam Bankman-Fried, swayed the regulator to push for the obliteration for the sector – but rather its closer and more careful regulation.
Even though Munger insists that there can be no winners in crypto, the US government is unlikely to act in too antagonistic a manner. The administration of President Joe Biden is already involved with pushing for a stronger and collective response across all levels of government with law enforcement agencies, such as the Federal Bureau of Investigation setting up dedicated task forces to crack down on cryptocurrency crime.
Munger is not the only old-guard banker and investor to have been critical of the crypto sector. He is mostly backed by Warren Buffett, with whom he runs Berkshire Hathaway. Buffett, a similarly outspoken critic of crypto, has somewhat reduced the harness of his tone towards the crypto sector in recent months, although he still throws the occasional jab.
Today, Buffett admits that he believes no good would come out of crypto, but he feels powerless to stop its adoption. Munger may not be able to stop it either, but he is more than happy to speak up his mind.
Although Fiona doesn't have a long-spanning background within the gambling industry, she is an incredibly skilled journalist who has built a strong interest in the constantly growing iGaming network. The team at GamblingNews.com is glad to have her on our roster to help deliver the best stories as soon as they hit. Aside from writing, she loves to dabble in online casino games such as slots and roulette, both for her own enjoyment and also as research to better improve her understanding of the industry.
Blockchain February 3, 2023
Blockchain February 3, 2023