Why do people invest in crypto? ‘It’s partly fraud and partly delusion,’ says Charlie Munger

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By Weston Blasi

‘There are people who think they’ve just got to be in on every deal that’s hot…I think it’s totally crazy,’ he added in the wake of FTX’s bankruptcy filing.

Charlie Munger, vice chairman of Berkshire Hathaway (BRKA), is not a big fan of crypto and shared his thoughts on it in the wake of the recent FTX bankruptcy.

“It pains me that in my own country I see people that were once regarded as very reputable people helping this thing exist, promoting their use and so forth,” he said during a CNBC interview that aired on Tuesday. “This is a very bad thing.”

Munger’s interview was conducted after FTX’s financial collapse and after now-former CEO Sam Bankman-Fried relinquished control of the company.

See also: Tom Brady, Steph Curry and Kevin O’Leary set to lose big from FTX bankruptcy filing

What and who is to blame for those good people making poor investing decisions? Munger believes it could be a combination of things.

“It’s partly fraud and partly delusion,” Munger stated. “That’s a bad combination.”

“There are people who think they’ve just got to be in on every deal that’s hot…I think it’s totally crazy,” he added.

See also: ‘The Big Short’ author Michael Lewis has been traveling with Sam Bankman-Fried and will write a new book on FTX collapse: report

Munger and Berkshire Hathaway CEO Warren Buffett have been crypto critics in recent years — Munger has been a vocal critic of bitcoin, specifically.

“When you have your own retirement account and your retirement advisor suggests you put all your money in bitcoin, just say no.” He later called the digital assets “stupid” and “evil.”

FTX paused withdrawals last week amid a multibillion liquidity crunch. Rival crypto exchange Binance announced interest in an FTX takeover prior to the bankruptcy filing, but opted against the move and later called FTX’s financial issues “beyond our control or ability to help.”

Bankman-Fried saw his net worth plummet by billions after FTX’s collapse. Financial groups that backed FTX include: Third Point Ventures, Tiger Global, Sequoia Capital, SoftBank and BlackRock (BLK).

Bitcoin’s price is up 3.87% on Tuesday, but down 71% over the past year. The price for ether is up 3.72% on Tuesday but down 70.23% over the past year.

-Weston Blasi

 

(END) Dow Jones Newswires

11-15-22 1132ET

Copyright (c) 2022 Dow Jones & Company, Inc.

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