There will be no Berkshire Coin cryptocurrency, Berkshire Hathaway Chairman Warren Buffett said at the company’s annual shareholder meeting on April 30, nor will there be a Buffett Coin.
“We can put out Berkshire coins,” Buffett said, adding that whatever people want to call them, in the end it would be a form of money. “There’s no reason in the world why the United States, government whose currency people prefer … is going to change to where they let Berkshire money replace theirs.”
Anyone who thinks that, he added, “is out of their mind.” The topic, needless to say, came up when the Oracle of Omaha was asked about Bitcoin.
Buffett, who has called the biggest cryptocurrency “rat poison squared,” said that if he was offered 1% of all the farmland in the U.S. for $25 billion — U.S. farmland as a whole is worth about $2.7 trillion, according to Statista — “I’ll write you a check right now,” because “the farms are going to produce food.”
On the other hand, Buffett said he wouldn’t pay $25 for all the bitcoin in existence, which currently has a market cap of $736 billion, “because what would I do with it? I have to sell it back to you one way or another.”
It’s not just that bitcoin does nothing and is backed by nothing, Buffett said — it’s that it costs something to buy nothing.
“There’s all kinds of frictional costs that are real, that somebody has paid to a bunch of people who facilitate this game,” he added. “There’s no more money in the room. It’s just changed hands with a lot of maybe fraud and costs involved.”
Part of the problem, Buffett said, is that crypto has “got a magic to it.”
Comparing it to an insurance company trying to sell itself as a tech company, he added, “People have attached magic to lots of things. I mean, a goal on Wall Street is to create magic.”
But Buffett also, at least in a backhand way, acknowledged the size of the bitcoin market in the U.S., noting that “25% of the people of the country [will] get mad because we’ve said what we’ve said today.”
That roughly matches PYMNTS’ April study on the U.S. crypto consumer, which found that 23% own or had owned crypto in the past 12 months.
China’s Got It Right
Buffett’s 98-year-old business partner Charlie Munger was, as ever, rather more colorful on the subject.
Berkshire Hathaway’s vice chairman, said at the annual meeting: “In my life, I try and avoid things that are stupid, evil and make me look bad in comparison to someone else. Bitcoin does all three.”
Munger continued that it is “stupid” because he expects it will be worthless, “evil” because it undermines the U.S. economy and economic system, and “looks bad” because “it makes us look foolish compared to the communist leader in China — he was smart enough to ban Bitcoin in China. With all of our presumed advantages of civilization, we are a lot dumber than the communist leader in China.”
See also: The U.S. Crypto Consumer: Cryptocurrency Use In Online and In-Store Purchases
But bitcoin has another cost neither Buffett nor Munger mentioned, which is its carbon footprint — currently more than Malaysia on an annualized basis.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More