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Charlie Munger: US made 'huge mistake' allowing crypto trading

Charlie Munger, Chairman of the Daily Journal and Vice Chairman of Berkshire Hathaway gives his thoughts on cryptocurrency markets and exchanges.

Video Transcript

ANDY SERWER: Shifting gears, Charlie, I want to ask you about cryptocurrency, which you have been very negative about calling it rat poison. And you hated the success of Bitcoin, but are you surprised that it's gotten even more mainstream then, since then?

CHARLIE MUNGER: Well, I'm not survived-- if you stop to think about it, it's an ideal currency if you want to commit extortion, or kidnapping, or have a protection racket, racket or something. Why should a civilized government want an ideal untraceable technology to come into the payment system run by a bunch of people who want to get rich quick for doing very little for civilization? Of course, I hate it.

I don't think it's a-- I don't think it's good that our country is going crazy over Bitcoin and its ilk. I think the Communist Chinese were wiser than we were. They just banned it.

ANDY SERWER: Any predictions on what's going to happen with crypto in the United States?

CHARLIE MUNGER: No. You let a bad genie out of a bottle, God knows what happens. I think it was a huge mistake to, to allow it at all. And the truth of the matter is our regulatory establishment, when they quit the government, they go out into this heavily promotional capitalism. And so it's very hard to get the government to make good wise decisions about something like Bitcoin.

ANDY SERWER: Charley, last year Robinhood, the new broker dealer, issued a statement saying people are tired of the Warren Buffett's and Charlie Munger's of the world acting like they are the only oracles of investing. What's your response to that? And where do you stand on day trading apps like Robinhood?

CHARLIE MUNGER: Well, I think it's a-- I were the benign dictator of the world, I would make it unfeasible to make short-term gains in securities, because we now mix up a legitimate activity, capital raising for enterprises that need money to do their capitalistic function with a gambling casino, where people come in gamble. And those two functions, when they're mixed as they are in a stock market or Bitcoin, create a speculative mess and a speculative orgy.

And it's dangerous for the Republic. It isn't good to have a lot of people trying to get easy money for sure just from gambling. And the people that are preying on them, the salesmen and the market makers, they're not the most admirable people either. So, no, I don't like it at all.

As I say, most old men don't, of course, and a lot of people think, well, just Warren and Charlie don't understand it. Well, I think we do understand it, and we know it isn't good for our Republic. And we can't do much about it. So we spend our time on the matters we can do something a lot.