Buffett, Munger, Gates Come Out Swinging Against BitcoinRyan Tucker
The Berkshire Hathaway annual shareholder’s meeting was held this past weekend, and it featured a number of high-profile comments about Bitcoin. As was perhaps to be expected by those who have benefited greatly from speculative activity in the stock market, all of them were bearish on Bitcoin and bullish on stocks. Three billionaires, Warren Buffet, Charlie Munger, and Bill Gates all teamed up against Bitcoin, helping to keep a surging Bitcoin from breaking the $10,000 threshold over the weekend.
Buffett’s comments about Bitcoin were that it was equivalent to “rat poison squared.” He also made similarly off-base comments about gold. Berkshire Vice Chairman Charlie Munger likened Bitcoin to a “turd” and claimed that it was “anti-social, stupid, and immoral.” He further compared Bitcoin trading to trading freshly harvested baby brains. Rounding out the comments from the trio of billionaires were Microsoft founder and Berkshire Hathaway board member Bill Gates’ comments that Bitcoin was a “greater fool theory type of investment,” and that he would love to short Bitcoin if he could figure out a way to do it.
It seems clear from the comments of these establishment billionaires that they feel threatened by Bitcoin and its ability to disrupt the financial markets that have made them so fabulously wealthy. They’re correct in their assertions that there isn’t anything intrinsically valuable about Bitcoin, but that’s true about any good. Value is ascribed to goods by their users, and Bitcoin fills a niche that many people didn’t realize they needed filled, which is why it has risen in value so greatly.
Bitcoin is no different than the US dollar in that it is essentially created ex nihilo and offered to those who demand it. Unlike the dollar, however, Bitcoin’s supply is limited and there is no central bank to create an unlimited amount of money. That money creation is why people distrust the dollar and the Federal Reserve and are flocking to Bitcoin and cryptocurrencies, but it is also what has driven successive stock market bubbles that have made men like Buffet, Munger, and Gates billionaires. Their success is due just as much as to the Federal Reserve’s monetary largesse as it is to their own business acumen.
That’s why Bitcoin IRA investors should take everything they say with a grain of salt. Those who are already at the top are threatened by competition and will naturally seek to denigrate that competition. But it’s best to keep in mind the famous quote (mis)attributed to Gandhi: “First they ignore you, then they laugh at you, then they fight you, then you win.”