Buffett and Munger rejected crypto as bitcoin neared $10,000

Warren Buffett and Charlie Munger used Berkshire Hathaway’s annual shareholder meeting on May 5, 2018 to deliver an unusually forceful institutional rejection of bitcoin and other cryptocurrencies. Buffett argued that crypto assets produced no underlying value and would reach “bad endings,” while Munger characterized cryptocurrency trading as “dementia.”

The remarks did not change Bitcoin’s software, create a regulatory rule or disclose a Berkshire transaction. Their significance came from the speakers and setting: the chairman and vice chairman of one of the world’s best-known public companies were applying Berkshire’s productive-asset framework to a digital-asset market recovering from its early-2018 decline.

Before the onstage discussion, CNBC journalist Becky Quick reported that Buffett had described bitcoin to her as “probably rat poison squared.” CNBC’s surviving meeting recording shows that neither Buffett nor Munger repeated that precise phrase during the shareholder question-and-answer session. The distinction matters because the phrase was a contemporaneously reported pre-session comment, while their longer criticism was delivered and recorded onstage.

The case Buffett presented

Responding to a cryptocurrency question, Buffett compared crypto assets with other scarce but nonproductive objects. His argument was that an investor buying such an asset depended on another buyer later paying more, rather than receiving cash flows generated by a business or productive property.

Buffett said speculative demand could reinforce itself for an extended period and reach extraordinary valuations. He nevertheless predicted an eventual adverse outcome and alleged that the market attracted opportunists seeking to profit from people pursuing rapid wealth.

Those were Buffett’s opinions and allegations, not findings from a technical, economic or enforcement investigation. The meeting record does not show that Berkshire analyzed Bitcoin’s issuance rules, settlement function, security model or transaction history. Nor does the productive-asset test alone resolve whether bitcoin could be valued as money, a digital commodity or access to a payment network.

Munger’s objection was broader and more moralistic. He said cryptocurrency trading was antisocial and compared its popularity with speculation in undesirable commodities. His language established the depth of Berkshire leadership’s hostility, but it did not supply empirical evidence about protocol performance or market integrity.

Bitcoin was approaching a contested threshold

Kraken’s May 5 daily market report displayed BTC at $9,735, up 0.90%, with $83.4 million traded on the exchange. Kraken reported $215 million of activity across all its markets, which included crypto instruments and pairs denominated in dollars, euros, yen, Canadian dollars and pounds.

CoinMarketCap’s separate May 5 historical snapshot listed bitcoin at $9,858.15, up 1.40% over its reported 24-hour window and 4.85% over seven days. It recorded a market capitalization of $167.760 billion and reported 24-hour volume of $7.652 billion. On that snapshot, BTC was approximately 1.4% below $10,000.

The two datasets are not interchangeable. Kraken’s figures describe one venue, while CoinMarketCap aggregated markets. Neither record represents a synchronized closing auction, because bitcoin traded continuously, and the surviving Kraken report does not clearly identify its cutoff timezone or displayed-price methodology. CoinMarketCap’s snapshot likewise does not expose every constituent venue or an executable global price.

The market evidence therefore establishes scale and direction, not causation. Bitcoin was trading near $10,000 while Buffett and Munger spoke, but the reviewed records do not demonstrate that their comments moved its price.

Why the divide mattered

Berkshire’s May 1 notice scheduled Buffett and Munger’s question-and-answer session for May 5 and arranged a public livestream. That reach turned their criticism into more than a private investment opinion. It exposed a widening conceptual divide between conventional value investors, who emphasized productive cash flows, and crypto participants assigning value to digitally enforced scarcity and transferable network assets.

The defensible May 5 conclusion is limited. Berkshire’s leaders publicly rejected cryptocurrencies in striking terms while bitcoin remained close to $10,000 on two market records. Their authority made the criticism consequential to the institutional debate; it did not make their forecast proven, and bitcoin’s event-day price did not disprove their concerns.