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Charlie Munger, the Vice-Chairman of Berkshire Hathaway, has said that it was a “huge mistake” for the US to endorse cryptocurrency trading. The 98-year old American investor has associated the cryptocurrency sector with a get rich quick scheme.
Charles Munger criticizes crypto trading
During an interview with Yahoo Finance, Munger said that cryptocurrencies were the ideal means of payment used in illegal activities such as extortion and kidnapping. He also opined that any civilized government should not endorse untraceable technology.
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He said,
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.
He added that it was bad for the US government to allow cryptocurrency trading. Moreover, he mentioned that the regulatory framework remained unclear as some people who left their positions in the regulatory sector joined the private sector, thereby promoting new technologies such as Bitcoin.
Despite Munger’s opinion, the US has failed to offer a clear regulatory framework regarding cryptocurrencies. Congress and the US Treasury have expressed concerns over the effects of private cryptocurrencies and stablecoins on financial stability. However, the level of crypto adoption in the US has continued to grow significantly.
Munger is still skeptical of day trading
Munger also addressed the issue of day trading in the stock market. Day trading by short-term traders in the stock market has become highly popular due to platforms such as Robinhood. However, Munger has noted that day trading carries more risks than benefits.
He opined that if he were a “dictator of the world”, he would make it unfeasible for short-term traders to derive gains from the securities market. He said that day trading had changed the stock market from a space that provided capital to private enterprises to a gambling casino.
“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.”