Yahoo Finance Legendary investor Charlie Munger says crypto is a terrible bet, and the US should ban it entirely
Charlie Munger slammed the rampant hype, lack of regulation, and unfairness of cryptocurrencies.
Warren Buffett's right-hand man urged the US government to ban the fledgling industry entirely.
Munger has blasted crypto as "rat poison," a "venereal disease," and an "open sewer" in the past.
Investing icon Charlie Munger has trashed the cryptocurrency industry as speculative, unregulated, and predatory, and called for the US to ban it altogether.
Warren Buffett's business partner and the vice-chairman of Berkshire Hathaway took aim at the likes of bitcoin, ether, and dogecoin in a Wall Street Journal op-ed titled "Why America Should Ban Crypto," published on Wednesday.
The 99-year-old billionaire noted that thousands of cryptos have become publicly traded with little or no government oversight. Some crypto businesses have handed large amounts of virtually free coins to promoters, in return for them coaxing the public into buying in at much higher prices, he said.
Munger bemoaned the "wild and woolly capitalism" at play. He compared it to mining, where salesmanship is often key to convincing investors to finance digging for precious metals that may not exist.
"Such wretched excess has gone on because there is a gap in regulation," he said. "A cryptocurrency is not a currency, not a commodity, and not a security. Instead, it's a gambling contract with a nearly 100% edge for the house."
"Obviously, the US should now enact a new federal law that prevents this from happening," Munger added.
The veteran investor pointed to two precedents. The first was the Chinese government banning crypto trading in 2021, citing concerns of crime, financial instability, and environmental damage. The second was the English Parliament's Bubble Act 1720, which clamped down on stock trading after the South Sea Bubble burst.
Munger suggested that once the US bans crypto, it might consider thanking Chinese leader Xi Jinping for his "splendid example of uncommon sense."
Buffett's right-hand man has been waging a public crusade against crypto for years. He has previously panned the industry as "partly fraud and partly delusion." He's also compared crypto to "rat poison," a "venereal disease," and an "open sewer," and said he wouldn't want a crypto executive to marry into his family.
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