Charlie Munger, the Vice Chairman of Berkshire Hathaway, on February 24 dismissed the recent bitcoin cryptocurrency frenzy and soaring share price of electric vehicle manufacturer Tesla.
During an interview at the Daily Journal’s annual shareholder meet, Munger was asked if he thought it was crazier for bitcoin to hit $50,000 or Tesla to reach a $1 trillion fully diluted enterprise value. “Well, I have the same difficulty that Samuel Johnson once had when he got a similar question, he said, ‘I can’t decide the order of precedence between a flea and a louse,’ and I feel the same way about those choices. I don’t know which is worse,” Munger responded.
Billionaire Elon Musk-led Tesla’s shares zoomed about 743 percent last year, even though it has dropped around 3 percent in 2021 so far. The electric car maker’s market cap is currently at $689 billion.
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Bitcoin surged to more than $50,000 last week after Tesla announced it had bought $1.5 billion worth of the much-talked-about cryptocurrency.
Asked if the biggest threat to banking was bitcoin or digital wallet, it at all, Munger was 97-year-old said: “I don’t think I know what the future of banking is, and I don’t think I know how the payment system will evolve,” he said. “I do think that a properly run bank is a great contributor to civilisation and that the central banks of the world like controlling their own banking system and their own money supplies.”
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Thus, Munger said, he doesn’t believe bitcoin will end up as the medium of exchange for the world.
“It’s too volatile to serve well as a medium of exchange. And it’s really kind of an artificial substitute for gold. And since I never buy any gold, I never buy any bitcoin,” he said.
