Here's why Charlie Munger says crypto should have 'never been invented'

Charlie Munger advises steering clear of what he calls "insane booms".

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An increasing number of ASX investors have crypto on the brain.

And for good reason.

The world's number 1 crypto by market cap, Bitcoin (CRYPTO: BTC), has gained 204% over the past 12 months. That far outpaces the 9% gains posted by the S&P/ASX 200 Index (ASX: XJO) since this time last year.

Ethereum (CRYPTO: ETH), the world's number 2 digital token by market valuation, has performed even better. Ether has gained 666% in 12 months.

But not everyone's impressed.

Like Charlie Munger, vice chairman of Berkshire Hathaway and Warren Buffett's long-time right-hand man.

Speaking at the Sohn Conference 2021, Munger likened the crypto surge to an insane boom.

Why Munger wishes crypto didn't exist

Munger has long been a vocal critic of cryptos.

At today's conference he said (quoted by the Australian Financial Review):

I wish they'd never been invented. And again I admire the Chinese, I think they made the correct decision, which was to simply ban them. In my country, English-speaking civilisation has made the wrong decision. I just can't stand participating in these insane booms, one way or another.

But aren't most the well-known cryptos gaining in value? And indeed, aren't they seeing a rapid increase in institutional adoption?

Perhaps. But Munger said he approaches making money with a different attitude:

It seems to be working; everybody wants to pile in, and I have a different attitude – I want to make my money by selling people things that are good for them, not things that are bad for them.

Believe me, the people who are creating cryptocurrencies are not thinking about the customer, they're thinking about themselves.

What's happening with Bitcoin and Ethereum today?

Both the number 1 and number 2 crypto are slightly in the red at the time of writing.

Ethereum is down 0.2% to AU$6,349. Bitcoin is also down 0.2% to AU$79,524.

A fairly level day of trading for the notoriously volatile asset class.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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