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

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

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

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

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

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

@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

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

“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

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.)

Notes:

  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, Charlie Munger, and Bill Gates, Note: Text below has been transcribed from the video by QI, News source information: Fox Business is a business and financial news company based in the U.S. (Video accessed at video.foxbusiness.com on February 11, 2021) link
  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: Clip shows an interview conducted in March 2014 with Warren Buffet on CNBC Squawk Box, (Quotation starts at 0 minute 6 seconds of 25 minutes 25 seconds), Text transcribed from video by QI, (This video is a collection of clips showing Warren Buffett and Charlie Munger’s comments on bitcoin and cryptocurrencies) (Accessed on youtube.com on February 9, 2021) link
  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 Today is a division of Gannett Satellite Information Network. (Accessed usatoday.com on February 9, 2021) link
  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 from the accompanying video on the CNBC webpage, Website description: Website of cable channel specializing in business news and commentary. (Accessed cnbc.com on February 9, 2021) link
  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: Video excerpt from interview with Warren Buffett at the annual meeting of Berkshire Hathaway, (Quotation starts at 5 minute 21 seconds of 25 minutes 25 seconds), Further description: This video is a collection of clips showing Warren Buffett and Charlie Munger’s comments on bitcoin and cryptocurrencies) (Accessed on youtube.com on February 11, 2021) link
  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 February 11, 2021) link
  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: Video excerpt from annual meeting of Berkshire Hathaway; interview with Warren Buffett and Charlie Munger (Quotation starts at 9 minute 42 seconds of 25 minutes 25 seconds) Further description: This video is a collection of clips showing Warren Buffett and Charlie Munger’s comments on bitcoin and cryptocurrencies) (Accessed on youtube.com on February 9, 2021) link
  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 is an international news organization. (Accessed qz.com on February 10, 2021) link
  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 on twitter.com on February 21, 2021) link