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this is Matthew Crowder from Trader University and today I want to talk a little bit about how Warren Buffett and Charlie Munger are actually right about crypto I prefer to call these guys by my pet name which is Charlie Muppet and Warren Muppet because they really are kind of the Muppets of the Fiat Financial system and they begin to look more and more like the Muppet characters Charlie Muppets of course is the billionaire business partner of Warren Buffett and together they make some of the softest and nicest old men's underwear that you can find anywhere in Massachusetts I want you to check out their amazing modern textile plant where this all happens and in their free time they also enjoy preying on the poor well Charlie Munger wrote an editorial On The Wall Street Journal on February 1st of 2023 why America should ban crypto and the the sub line says it isn't currency it's a gambling contract with a nearly 100 percent Edge for the house and I think this is actually correct he starts off the editorial by saying and this is a quote from his essay in the Wall Street Journal in the U.S in recent years privately owned companies have issued thousands of new cryptocurrencies large and small these have later become publicly traded without any governmental pre-approval of disclosures this is the same thing we've been saying on this channel unregistered Securities everywhere and the SEC is in the process of going after these guys Monger Muppet goes on to continue in some cases a big block of cryptocurrency has been sold to a promoter for almost nothing after which the public Buys in at much higher prices without fully understanding the predilution in favor of the promoter this is something that's definitely true for a lot of these public blockchains that have these large initial token allocations to insiders you can see the pink or red here is The Insider allocation for example Solana as we talked about many times in 2021 and 2022 48 of the pre-mine of the initial token allocations went to insiders like Venture capitalists the team and other members of the company and in the process they needed to pump and dump in order to get liquidity for their Venture capitalists like chamoth for example and I actually made a video where we can see these people laughing David sacks and chimath laughing about how they're getting ready to dump their salon on you this video was made at the peak in November of 2021 and Solana has really gone straight down from there but I have to say that in this Wall Street Journal editorial Monger is not wrong most cryptocurrencies are just unregistered Securities as we said they're a workaround for Venture capitalists for VCS and insiders to be able to dump on retail investors without having to have the patience or do all of the hard work necessary to have an initial public offer in an IPO but here's the funny thing about this editorial Monger never mentions Bitcoin and this makes me wonder does he realize that it was not issued by a company Bitcoin is very very different from cryptos I've been arguing for a couple years here Bitcoin is a digital commodity it's not easy issued by a corporation it's not issued by a government and it's not controlled by insiders like ethereum and cardano are there's no pre-mine there's no living founder with a bully pulpit there's no proof of stake which allows pre-minded insiders and beneficiaries to exert extra control over the protocol so Munger is actually right about crypto but he is wrong about Bitcoin and I would say that given his background it's actually a pretty pathetic mistake to make especially considering that Charlie Muppet and Warren Muppet have spent decades telling people to stick to their quote-unquote circle of competence this is an article from CNBC in 2017 and it says that one of the waste mongers tried to avoid making stupid decisions is by sticking to what he calls his circle of competence it's the same rule that his friend Warren Buffett lives by the circle of competence is simple each of us through experience or study has built up useful knowledge on certain areas of the world and so the idea is you should invest and talk about what you understand unfortunate virtually Warren Buffett and Charlie buff Charlie Munger Muppet have not done their research on bitcoin and it is clearly outside of their circle of competence so I have no idea why Charlie is opinion on it I love this quote from Charlie those who keep learning will keep rising in life which is absolutely true but my question for Charlie Muppet would be so when did you stop rising in life Charlie does it have something to do with the fact that you and Warren made your fortunes from Fiat food from Fiat money to basement and from bank bailouts I'll link to a couple articles here I love this one called Warren bailout Buffett this one how a Warren Buffett game gained from the bank bailout these are all mostly the bailouts in 2008 and 2009 and finally this article about how Buffett made all this money by betting on a Goldman Sachs a Goldman Sachs bailout so this really is crypto looks a lot like the activities of someone like longer or buff it Bitcoin by contrast is impossible to game there's no centralized thing and you don't get to go to the government for bailouts or for cantillionaire effects or you don't get to stand stand next to the money printer because there's no way to print up extra Bitcoin you either have to mine it or you have to exchange your hard-earned Fiat for Bitcoin so I think Monger is quite right about this article but there is this glaring Omission that he doesn't treat Bitcoin as something being very different as a digital commodity and he does this because he's either disingenuous and a liar or he hasn't done his research and he's straying outside of a circle of competence so I'm not sure which is worse if you found this video helpful be sure to hit that subscribe and like buttons hit the notification Bell if you want to be 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