Recently, the valuation of more than 30 billion dollars, the world's top three cryptocurrency exchange FTX bankruptcy, founder Sam Bankman Fried resigned as CEO of the company shocked the financial circle, many financial people have expressed their views, especially Berkshire Hathaway Vice Chairman Charlie Munger's statement is the most direct.

In an interview with CNBC on Monday, Munger, 98, said: "It's painful to see people of stature in your own country helping this kind of thing exist. This is a very, very bad thing, and this country does not need a currency that benefits the 'kidnappers.'"

So why do many people make this poor investment decision?

Starting with Bitcoin, cryptocurrency was only hyped or invested by technology geeks and anarchist utopian believers at the beginning, and then gradually attracted the attention of mainstream investment institutions, from Wall Street investment banks and venture capital institutions such as Sequoia and SoftBank, to billionaires such as Musk, and then to traditional mainstream institutions such as sovereign investment funds and pension funds, and some of them directly bought virtual coins. Some invest in the virtual currency industry chain, from directly mining to selling shovels, selling water, trading ore in all aspects, have attracted a lot of money into, in just a few years, a virtual currency gold industry chain has taken shape.

The craze for virtual currencies has been embraced by mainstream institutions, while ordinary people believe that institutions have talent and information advantages, and their actions are the direction of the market. The South American country of El Salvador has even adopted Bitcoin as the country's sovereign currency, which has aroused some people's enthusiasm for virtual coins.

Munger agrees that people are influenced by a combination of factors. But he criticized, "It's part fraud, part delusion, and it's a very bad combination."

He added: "Some people think they have to be in every hot deal. I think it's completely insane."

Munger and his "best mate," Warren Buffett, have been critics of cryptocurrencies in recent years, with Munger being particularly vocal in his criticism of bitcoin BTCUSD.

At Berkshire Hathaway's annual meeting in April, Munger said, "When you have your own retirement account and your retirement adviser recommends that you put all your money in Bitcoin, you just say no." He later called the digital assets "stupid" and "evil."

Source: FX110