The 99 Year Old Billionaire; Should Bitcoiners Care What He Thinks?
Charlie Munger, a 99-year-old billionaire investor, recently sparked a heated debate in the cryptocurrency community after he expressed his disdain for Bitcoin and other digital currencies.
Munger has called for a complete ban on cryptocurrencies, similar to China's stance on the matter. His comments have been met with backlash and criticism from many supporters of digital assets.
Good Reputation
Despite his age, Munger's comments have been taken seriously, and his investment advice has been highly valued over the years. However, his views on Bitcoin have caused many to question whether he truly understands the technology and the potential it holds for the future of finance.
So, what exactly is Munger's problem with cryptocurrencies, and why is he so vehemently opposed to them? To understand his stance, it's important to take a closer look at his life and general investment strategies.
A Brief Background
Munger's fortune was built on the back of the biggest monetary experiment in history – the Federal Reserve's establishment and the end of the Gold Standard in 1971 under President Nixon. As a result, Munger is a direct beneficiary of the Cantillon Effect, which refers to the uneven distribution of new money throughout the economy. The Cantillon Effect benefits those who receive the new money first, while devaluing the purchasing power of those who receive it last.
Given his investment strategy and background, it's not surprising that Munger has no interest in cryptocurrencies. He believes that investing in US and Chinese stocks is the best way to store value and accumulate wealth. For him, any investment outside of stocks doesn't make sense and doesn't benefit him.
Munger's criticism of cryptocurrencies has been characterised by his use of derogatory terms, such as "crypto shit," and his dismissal of the technology's potential. He has also called those who invest in cryptocurrencies "idiots" and accused them of engaging in "asocial behavior."
Munger's disdain for cryptocurrencies extends beyond Bitcoin to all other digital asset protocols and altcoins. However, his stance on Bitcoin is particularly noteworthy, given its rising popularity and geniune potential to disrupt traditional financial systems.
Capital Drain from Equities?
What if Munger did take a closer look at Bitcoin and realised its potential to challenge traditional investment strategies? What if he recognised that Bitcoin has the potential to become a significant store of value, potentially taking market share away from stocks?
If this were the case, it would highly likely make Munger even more angry and participate in lobbying for an outright ban on Bitcoin. However, such a ban is unlikely to be effective, given Bitcoin's decentralised nature and global user base; something Munger may not fully understand.
A Millenial, and Younger, Thing?
Despite Munger's negative views on cryptocurrencies, many in the cryptocurrency community, particularly younger people, believe that his opinions are outdated and irrelevant. Cryptocurrencies have gained significant traction over the past few years, and many think it would be foolish to ignore their potential.
In the end, whether Munger likes it or not, digital assets - particularly Bitcoin and Ethereum, are very likely here to stay.
The US government is unlikely to ban Bitcoin, given its potential to counter the rise of China. Therefore, Munger's opinion on the matter may be meaningless, and he may have to come to terms with the fact that he cannot control the future of finance.
Some Facts and Figures
Here are some facts and figures to understand the argument against caring what he thinks:
Munger's Background and Wealth
Munger was born just 11 years after the Federal Reserve was established and made most of his fortune after Nixon ended the Gold Standard in 1971. He is a direct beneficiary of the monetary experiment that followed and has no plan or reason to change anything. He has also heavily invested in China, which has a similar monetary system, but openly communist. Munger's wealth, persona, and world view are built on the "benefits" of the Cantillon Effect.
Munger's Disdain for Non-Stock Investments
Munger has no need for anyone investing in anything other than stocks, be it crypto or other assets. He sees stocks as the only viable store of value and vehicle for savings, and anything else doesn't make sense for him.
Potential Threat of Bitcoin to Munger's Investment Strategy
Munger may not have fully understood Bitcoin and the difference between it and other cryptocurrencies. However, if he does realise its potential, he may see it as a threat to his investment strategy. Bitcoin has the potential to suck the store of value premium out of stocks and reduce their appeal, which would not benefit Munger. A government ban may be his only solution to prevent this from happening.
Bitcoin's Resilience and Potential Geopolitical Significance
Despite Munger's opposition, Bitcoin is here to stay. The US government is unlikely to ban it, as it is their best shot at countering China's rise. Munger's investment strategy for the 21st century may be ruined by Bitcoin's resilience and potential geopolitical significance.
Concluding Remarks
In conclusion, while Munger's opinion may carry weight due to his wealth and influence, it is important to consider the biases that may inform his stance. However, in the end, Bitcoin's resilience and potential may render his opinion obsolete regardless.