Avoid Bitcoin (BTC), Says Legendary Investor and Berkshire Hathaway Vice-Chairman Charlie Munger

Bitcoin (BTC) price has crashed back to $46,000 levels for the second time this week as the selling pressure on the world’s largest cryptocurrency remains around. The recent Bitcoin correction comes just a say after legendary investor Charlie Munger asked his followers to avoid Bitcoin investments.

Charlier Munger, the Berkshire Hathaway vice-chairman and long-time business partner of Warren Buffett was speaking at the annual meeting of shareholders of the Daily Journal Corporation in Los Angeles on Wednesday, February 24.

Munger said that the reason behind avoiding Bitcoin is that he doesn’t see BTC as a medium of exchange. “I don’t think bitcoin is going to end up the medium of exchange for the world. It’s too volatile to serve well as a medium of exchange. Bitcoin reminds me of what Oscar Wilde said about fox hunting. He said it’s the pursuit of the uneatable by the unspeakable,” said Munger.

However, while the world has been active debating about Bitcoin replacing Gold in the future, Munger said he doesn’t have any affinity for either of the two assets. He said: “It’s really kind of an artificial substitute for gold. And since I never buy any gold, I never buy any bitcoin, and I recommend other people follow my practice”.

Joining Charlie Munger in his Bitcoin criticism is Mastercard vice-chairman Ann Cairns. Speaking at a recent conference, Cairns Called Bitcoin too volatile to be used as a form of payment. Cairns added: “Bitcoin doesn’t behave like a payment instrument, It’s too volatile and it takes too long to transact. So if you and I went for a cup of coffee, and you know, I decided to pay with bitcoin, our coffee might cost me, I don’t know, 40% more by the time it was served — and it takes 10 minutes to actually settle the transaction”.

However, MasterCard isn’t leaving any stone unturned to embrace the crypto mania. Earlier this month, the payments giant said that MasterCard is working on integrating the facility to accept crypto payments for its merchants worldwide.

While all this discussion around Bitcoin being a risk asset takes place, banking giant JPMorgan recently recently recommended that one might expose 1% of their portfolio to Bitcoin as a hedge against other asset classes like stocks, bonds and commodities.

In a note to investors accessed by Bloomberg, JPM strategists including Joyce Chang and Amy Ho wrote: “In a multi-asset portfolio, investors can likely add up to 1% of their allocation to cryptocurrencies in order to achieve any efficiency gain in the overall risk-adjusted returns of the portfolio”.

On the other hand, institutional players are keen on launching Bitcoin derivative products. Last week, two big Canadian players launched their Bitcoin ETFs with a blockbuster opening in the market.