Charlie Munger, a 99-year-old billionaire and strong crypto critic, has elicited virile reactions from the online crypto community for being unnecessarily critical with his request to have the U.S. replicate the Chinese crypto ban.
A handful of comments on Munger’s Wall Street Journal opinion piece stated that his anti-crypto comments and his reference to China were bewildering because the United States practices a democratic system that eschews freedom.
Munger, a veteran investor and key figure at Berkshire Hathaway, has consistently held negative views toward cryptocurrency. Additionally, Munger has expressed his disapproval towards individuals who invest recklessly in popular trends without considering the potential outcomes.
A section of the irritated comments attributed Munger’s position to an old age defect that affects critical thinking and the ability to see crypto as maths, not a gambling contract.
Currently, the gambling sector, referred to by the Munger, is a multi-billion dollar licensed sector in the United States and across European countries.
The American Gambling Association reports that during the first 11 months of 2022, U.S. casinos and mobile gaming apps generated a record $54.93 billion in revenue. By the first quarter of 2022,
Despite the enormous revenues that mainly came from Americans’ gambling losses, the American government hasn’t banned gambling.
Although China has had its ban on gambling since 1949 and ban on crypto since 2021, the Asian country surprisingly houses the second highest number of bitcoin miners in the world, and there are currently talks and speculations around a possible lifting of the bank on crypto in China.
Charlie Munger calls for ban on crypto in the U.S.
Munger believes that cryptocurrencies should be banned in the U.S., as they are essentially a form of gambling where the house has an advantage.
He argues that this lack of regulation has allowed the crypto market to flourish and cause harm, and suggests that the U.S. government should step in with a new federal law to stop it.
Munger commended the Chinese communist regime’s endeavour to eliminate cryptocurrencies from their nation and recommended that the United States adopt a similar approach.
He also referred to England’s ban on the initial offering of common stocks in the 1700s as a historical example and proposed that the U.S. follow suit.
In 2021, Charlie Munger made a statement that sparked controversy among cryptocurrency enthusiasts on social media. Munger described the rapid growth of Bitcoin as “disgusting.”
He expressed his dislike for the success of bitcoin due to the false perception that it is a more efficient tool for criminal activities than fiat currencies.
‘It’s a gambling contract’
According to Charlie Munger, the absence of oversight and the inherent advantage for the facilitators in crypto transactions have led him to advocate for a ban on cryptocurrencies in the United States. He has compared the crypto market to a casino rather than a type of asset.
“A cryptocurrency is not a currency, not a commodity, and not a security. Instead, it’s a gambling contract with a nearly 100% edge for the house, entered into in a country where gambling contracts are traditionally regulated only by states that compete in laxity. Obviously the U.S. should now enact a new federal law that prevents this from happening.”
Charlie Munger, Investor.
Munger advocates for the elimination of cryptocurrencies through federal intervention in the U.S., citing the lack of proper regulation as the reason behind the current crypto boom. He expresses gratitude towards the Chinese ban on cryptocurrencies, praising it as a demonstration of practical wisdom.
Charlie Munger ultimately thinks that prohibiting cryptocurrencies would result in a reduction of damage and a more secure market. However, the billionaire investor did not clarify the extent of the ban, whether it covers trading, transactions, or just possessing cryptocurrencies.