Bitcoin: It’s Probably Rat Poison Squared

Warren Buffett? Charlie Munger? Liz Claman? Becky Quick? Mark Cuban? Apocryphal?

Dear Quote Investigator: The value of bitcoin has fluctuated dramatically. Extreme language has been used to either praise or vilify this prominent digital currency. The superinvestors Warren Buffett and Charlie Munger have made harsh pronouncements. Apparently, Munger said bitcoin was rat poison, and Buffett went further and said it was rat poison squared. Would you please help me to find citations?

Quote Investigator: Berkshire Hathaway Chairman Warren Buffett and Vice Chairman Charlie Munger have employed a sequence of hostile colorful expressions to decry bitcoin. In May 2013 Fox Business journalist Liz Claman conducted a joint interview with Charlie Munger, Warren Buffett, and Bill Gates. During the interview Munger described bitcoin as rat poison. Boldface added to excerpts by QI:^[1]Fox Business Video Clip, Video title: Munger/Buffett Disagree on Corporate Tax Rates, Video release date: May 6, 2013, Description of video: Interview conducted by Liz Claman of Warren Buffett, … Continue reading

Liz Claman: I just had to get your thought on Bitcoin, this… this… this digital currency that’s out there that people say, oh it might be the next big thing. What do you think?

Charlie Munger: I think it’s rat poison.
(Laughter)

Warren Buffet: Put him down as undecided.
(Laughter)

Below are additional selected citations in chronological order.

In March 2014 Warren Buffett appeared on CNBC Squawk Box, and he expressed doubt about the longevity of bitcoin:^[2]YouTube video, Title: Everything Warren Buffett & Charlie Munger Ever Said on Bitcoin & Cryptocurrency, Uploaded on Oct 12, 2020, Uploaded by: IDP Infinite Dreams Publishing, Description: … Continue reading

It’s not a currency. I mean it does not meet the test of a currency. I wouldn’t be surprised if it’s not around in 10 or 20 years.

The Associated Press reported on Buffett’s comment in March 2014:^[3]Website: USA today, Article title: Buffett bashes Bitcoin, wary of minimum pay hike, News Service: Associated Press AP, Date on website: March 3, 2014, Website description: News and commentary; USA … Continue reading

Bitcoin is billed as a virtual currency that has grown in popularity since its 2009 creation as a way to make transactions across borders without third parties such as banks.

“It’s not a currency,” Buffett said. “I wouldn’t be surprised if it’s not around in 10 or 20 years.”

Also, in March 2014 Buffett responded to Quicken Loans founder Dan Gilbert who asked him about bitcoin while both appeared on CNBC:^[4]Website: CNBC, Article title: Buffett blasts bitcoin as ‘mirage’: ‘Stay away!’, Date on website: March 14, 2014, Comment: Interview with Warren Buffett. The quotations below have been taken … Continue reading

Stay away from it. Well, it’s a mirage, basically. . . .
The idea that it has some huge intrinsic value is just a joke in my view.

Fox Business anchor Liz Claman interviewed Warren Buffett in May 2018 when he was attending the Berkshire Hathaway meeting. A CNBC correspondent was also present during the following dialog:^[5]YouTube video, Title: Everything Warren Buffett & Charlie Munger Ever Said on Bitcoin & Cryptocurrency, Uploaded on Oct 12, 2020, Uploaded by: IDP Infinite Dreams Publishing, Description: … Continue reading

Liz Claman: About five years ago we asked Charlie Munger; we were sitting right there, what he thought of bitcoin, and he said, “rat poison”. Back then it was about a hundred plus dollars per bitcoin. Today, it’s nine thousand. Is it still rat poison?

Warren E. Buffett: Well, it’s probably rat poison squared.

On May 5, 2018 Becky Quick of CNBC tweeted about Buffett’s remark:^[6]Tweet, From: Becky Quick @BeckyQuick, Time: 7:56 AM, Date: May 5, 2018, Text: @WarrenBuffett on bitcoin just now: “it’s probably rat poison squared.” #brk2018. (Accessed on twitter.com on … Continue reading

@WarrenBuffett on bitcoin just now: “it’s probably rat poison squared.” #brk2018

At the annual meeting of Berkshire Hathaway in May 2018 Warren Buffett and Charlie Munger were interviewed together. Buffett was asked about cryptocurrencies:^[7]YouTube video, Title: Everything Warren Buffett & Charlie Munger Ever Said on Bitcoin & Cryptocurrency, Uploaded on Oct 12, 2020, Uploaded by: IDP Infinite Dreams Publishing, Description: … Continue reading

Warren Buffett: You know it’s something where people who are of less than stellar character see an opportunity to clip people who are trying to get rich because their neighbor is getting rich buying this stuff that neither one of them understands. It will come to a bad ending.

After Buffett spoke Munger presented his analysis of cryptocurrencies:

Charlie Munger: Well, I like cryptocurrencies a lot less than you do, and so to me it’s just dementia, and I think the people who are professional traders that go into trading cryptocurrencies; it’s just disgusting. It’s like somebody else is trading turds and you decide, I can’t be left out.

In May 2018 the news website “Quartz” presented compact versions of the comments made by Buffett and Munger:^[8]Website: Quartz, Article title: Charlie Munger compares cryptocurrencies to “turds” and “dementia”, Article author: Corinne Purtill, Date on website: May 5, 2018, Website description: Quartz … Continue reading

“Cryptocurrencies will come to bad endings,” said Buffett, 87. He then turned to his business partner, Charlie Munger, another outspoken crypto skeptic.

“I like cryptocurrencies a lot less than you do,” replied Munger, 94. “To me, it’s just dementia. It’s like somebody else is trading turds and you decide you can’t be left out.”

In February 2021 billionaire investor Mark Cuban suggested via a tweet that cryptocurrency dogecoin was inexpensive enough that one could purchase it and be entertained by its price fluctuations:^[9]Tweet, From: Mark Cuban @mcuban, Time: 11:16 AM, Date: Feb 8, 2021, Text: When a Forbes reporter asks me about #dogecoin and whether it’s a bad look for crypto when people are buying it. (Accessed … Continue reading

Dogecoin is less than a dime. You can buy $1 worth or $10 worth and have fun watching it all day every day. Literally and I say this with all seriousness, it’s the best entertainment bang for your buck available

I bought a few dollars worth for my son and we watch it and discuss all it’s price movements and why they occur. It’s fun, it’s exciting and educational for him.

In conclusion, Warren Buffett and Charlie Munger have lambasted bitcoin and other cryptocurrencies with multiple remarks made over a period of several years. Bitcoin has ascended to remarkable heights in January 2021. Some commentators believe that the valuation of bitcoin reflects a classic bubble mentality. They expect its value to oscillate and ultimately crash. Other commentators believe it will increase in value.

Image Notes: Public domain image of painting of “Old Woman Examining a Coin by a Lantern” by Gerard van Honthorst circa 1623. Image has been resized and cropped.

(Great thanks to the anonymous financial advisor whose inquiry led QI to formulate this question and perform this exploration.)