Every year, Warren Buffett auctions off a three-hour lunch date to benefit Glide, a San Francisco charity that fights homelessness and addiction. This year, he'll be having lunch with 28-year-old Justin Sun, founder of cryptocurrency platform Tron and CEO of BitTorrent.
Sun's winning bid for lunch with the Oracle of Omaha was $4,567,888. That's a new record by a wide margin--last year's lunch went for about $3.3 million. Many are questioning, though, whether the lunch will be worth its big price tag, since Sun is clearly committed to Bitcoin and the cryptocurrency industry, for which Buffett has shown nothing but disdain.
Less than a month ago, ahead of the Berkshire Hathaway annual meeting, Buffett doubled down on his negative assessment of Bitcoin. "It's a gambling device...there's been a lot of frauds connected with it. There's been disappearances, so there's a lot lost on it," he told reporters. As for investing in Bitcoin, he said, "It doesn't do anything. It just sits there. It's like a seashell or something, and that is not an investment to me." Buffett's partner Charlie Munger has been even more blunt, saying that investing in Bitcoin is "just dementia."
At the same time, Buffett acknowledges the value of blockchain, the distributed ledger technology that powers Bitcoin and every other cryptocurrency, and which has many other applications as well, especially in the financial sector. He says Berkshire Hathaway is likely investing indirectly in blockchain already. That technology, he says, "is very big, but it didn't need Bitcoin."
Can Sun, 60 years younger than Buffett, ever hope to change his elder's mind? He certainly plans to try. In an open letter to the cryptocurrency community that Sun posted on Medium, he explains:
"Even one of the most successful investors of all times can sometimes miss a coming wave. Buffett has admitted he overpaid for a big investment food giant Kraft Heinz Co., while failing to realize the potential of the likes of Amazon.com Inc., Alphabet, the parent of Google and even Apple."
He's hoping to convince Buffett that Bitcoin represents another opportunity to get in early on something that will be big, just as Apple and Amazon once were. Bitcoin's performance isn't necessarily helping matters, as the currency lost $19 billion in total value literally overnight a few weeks ago, before rebounding somewhat. Bitcoin, and cryptocurrency in general had a terrible year in 2018, when investors watched the value of both Bitcoin and Ether tumble to a fraction of their once high prices.
As for Buffett, he's being gracious as always. In a statement released to the press, he said, "I'm delighted with the fact that Justin has won the lunch and am looking forward to meeting him and his friends. We are going to have a good time and Glide will use his contribution to help many thousands of people."
Sun's winning bid entitles him to bring up to seven guests to the lunch, which is traditionally held at Smith & Wollensky steakhouse in New York. He's said he wants to enlist other cryptocurrency industry leaders to help make his case, and so far has announced that he plans to invite founders from Ethereum, LiteCoin, and Binance CEO Changpeng Zhao, or "CZ," (who has already declined).
Will a three-hour lunch really be enough time for even eight luminaries of the cryptocurrency world to persuade Buffett that he's wrong about Bitcoin? Maybe not, Sun says. But he says he believes Buffett doesn't have the right sources of information about cryptocurrency and is being misled by the media. (If it struck Sun as ironic that he was making this statement to a media company, he didn't let on.) It will at least be an opportunity to introduce Buffett to some new ideas and new sources of information on cryptocurrency, he says.
But Sun also has a bigger, and perhaps more attainable goal. He told CNBC, he wants to become a bridge between the world of cryptocurrency and institutional investors. That's what makes Sun's record-setting bid look like a smart move. Whether he changes Buffett's mind or not, the lunch will give Sun the kind of high profile, and greater legitimacy, than he could have gotten any other way, for any amount. Look at it that way, and the almost $4.6 million he's promised to pay might actually be a bargain.