At the Daily Journal’s annual meeting hosted by Yahoo Finance, Charlie Munger was asked by a member of the audience what he saw as the biggest competitive threat to U.S. banks over the long term.
The question, centered on the potential technological disruption from the likes of Amazon and Apple Pay, digital wallets and bitcoin, prompted Munger to respond that he did not know how the payments system would evolve.
The Berkshire executive said, though, he didn’t think bitcoin would end up as the world’s medium of exchange, calling it an “artificial substitute for gold.”
“Since I never buy any gold, I never buy any bitcoin,” Munger said. “I recommend other people follow my practice.”
The Daily Journal Corporation – the U.S. publishing company chaired by Munger – has equity stakes in Bank of America and U.S. Bank.
“I do think that a properly run bank is a great contributor to civilization and that the central banks of the world like controlling their own banking system and their own money supplies,” he said.
Munger then went on to paraphrase an Oscar Wilde quote on fox hunting, saying bitcoin reminded him of those who buy the nascent asset class as “the pursuit of the uneatable by the unspeakable.”
Multiple questions relating to bitcoin were posed during the almost two-hour-long session. Asked whether his opinion on cryptocurrencies had remained the same or if the Daily Journal would consider bitcoin as an asset on the balance sheet, similar to Tesla’s recent investment, Munger summarily dismissed the possibility.
“No, we will not be following Tesla into bitcoin,” he said.
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The 97-year-old vice chairman of Berkshire Hathaway said buying bitcoin is “the pursuit of the uneatable by the unspeakable.”