Bill Gates Blasts Cryptocurrency & NFTs As Being ‘100% Based On Greater-Fool Theory’
“Obviously expensive digital images of monkeys are going to improve the world immensely,” Gates cracked.
While speaking at a recent seminar hosted by TechCrunch, the multibillionaire Microsoft cofounder dismissed the crypto game as being “100 percent based on ‘Greater Fool’ theory.” As CNBC points out, the idea behind such a theory is that one person, a “fool,” purchases already-overvalued assets with the hope of selling for a profit when there are enough other investors, or “greater fools,” willing to pay more.
Gates also sarcastically noted, “Obviously expensive digital images of monkeys are going to improve the world immensely,” referring to the Bored Ape Yacht Club craze that exploded in 2021.
“I’m used to asset classes … like a farm where they have output, or like a company where they make products,” Gates added. “I’m not involved in [crypto]. I’m not long or short any of those things.”
Gates has criticized crypto before, sparring with fellow billionaire and sometime-nemesis Elon Musk last year over whether Bitcoin is too risky for retail investors and the environmental harm of mining cryptocurrency coins.
“NFT” is of course an acronym for “Non-Fungible Token,” a digital crypto-based token containing a unique encrypted ID that supporters claim proves ownership of digital assets. But many observers fear that crypto and NFTs are headed for a dot.com-bubble-style burst if recent market trends continue.
Cryptocurrency boosters have had a tough 2022 so far. Popular crypto exchange Coinbase announced it was laying off 18% of its employees and warned of an upcoming “Crypto Winter” as the digital currency market continues to crumble.
Coinbase’s market value imploded as investors continued to sell off crypto, bailing out of risky assets in anticipation of sharp increases in interest rates to tackle inflation, reports CNBC.
CEO Brian Armstrong pointed to a possible recession, and a need to manage Coinbase’s burn rate and increase efficiency. He also said the company grew “too quickly” during a bull market.
“We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period,” Armstrong said in the email, adding that past crypto winters have resulted in a significant decline in trading activity.
Crypto lending firm Celsius paused all account withdrawals, citing “extreme market conditions.” This happened as Bitcoin, the world’s largest cryptocurrency, dropped down to nearly $20,000 this week, marking its lowest value since 2020.