Cryptocurrencies got slammed by Warren Buffett and business partner Charlie Munger, who reiterated their negative opinions of digital tokens at the Berkshire Hathaway annual meeting last week.
According to a report in Quartz, Buffett said cryptocurrency is not a productive asset and that it has no intrinsic value. He said it is common for scammers to use the digital tokens to swindle people. “Cryptocurrencies will come to bad endings,” said Buffett.
Munger noted that he likes cryptocurrencies even less than Buffett. “To me, it’s just dementia. It’s like somebody else is trading turds and you decide you can’t be left out,” Munger said.
Buffett's and Munger's comments come at a time when cryptocurrency is getting further scrutiny by regulators and is facing criticism by all sorts of industry players. In late April, Gary Gensler, the finance chief for Hillary Clinton’s 2016 presidential bid and one of the top financial regulators in the Obama administration, delved into the world of blockchain in a role at the Massachusetts Institute of Technology (MIT).
According to a report in The New York Times last month, Gensler will write and teach about blockchain technology and the impact it will have on the financial industry. He will also reportedly use his role at MIT to warn that many of the blockchain projects will face more regulation. Gensler has argued that the popular cryptocurrencies Ether and Ripple violated U.S. securities regulations.
“There is a strong case for both of them — but particularly Ripple — that they are non-compliant securities,” Gensler told The Times in an interview at the time. “2018 is going to be a very interesting time. Over 1,000 previously issued initial coin offerings, and over 100 exchanges that offer ICOs, are going to need to sort out how to come into compliance with U.S. securities law.”