Bill Gates Says NFTs and Crypto Are 100% Based on the Biggest Fool Theory

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Co-founder Bill Gates said he believes cryptocurrencies and NFTs are “100%” based on the biggest fool theory.

The 66-year-old billionaire was referring to the idea that overvalued assets will continue to rise because there are enough people willing to pay high prices for them. He joked that “expensive digital images of monkeys” would “make the world a whole lot better”.

Mr. Gates, who for years ridiculed cryptocurrencies, said At a TechCrunch event in Berkeley, Calif., on Tuesday, people bought cryptocurrencies and NFTs based on the idea that whatever the price might be sold for more because “someone ‘one will pay more than me’.

He said he was not involved in “any of these things”, neither long nor short term. Other wealthy investors and executives, including Warren Buffett and Jamie Dimon, have also expressed skepticism towards cryptocurrencies. Mr. Buffett once called bitcoin “the rat’s death squared.”

NFTs, or non-fungible tokens, are digital proof of a purchase for goods like art, digital music, and sneakers. After gaining popularity, their demand seems to have stagnated recently. Rising interest rates have crushed risky bets in financial markets – and NFTs are among the most speculative.

Referring to NFTs, Mr. Gates appeared to be commenting on an ape from the Bored Ape Yacht Club NFT collection.

He said he preferred asset classes “like a farm where they have production or a company where they make products.”

His comments come as bitcoin and other cryptocurrencies have fallen sharply in recent days amid a broad global market rout, reversing much of the gains at the start of the pandemic when a wave of investors took hold. started betting on digital currencies.

Bitcoin price recently traded just above $20,000 on Wednesday. It has lost more than two-thirds of its value since its November all-time high, the fourth-worst selloff in the cryptocurrency’s 13-year history.

Fresh waves of judgment swept across the cryptocurrency industry this week. Coinbase Global Inc crypto exchange.

said it would cut nearly a fifth of its staff and crypto lender Celsius Network LLC, one of the largest crypto lenders, told users on Sunday night that it was suspending all withdrawals, trades and transfers between accounts due to extreme market conditions. The company hired a law firm to review restructuring options.

Mr Gates is the fourth richest person in the world with a net worth of $113 billion, according to the Bloomberg Billionaires Index. He wrote during a Q&A session on Reddit last month that he doesn’t own any cryptocurrency.

“I like to invest in things that have a valuable return,” he said.

“The value of crypto,” he added, “is exactly what another person decides someone else will pay for it.”

Related video: The rise of “play-to-win” video games – in which players trade NFTs – offers insight into how the metaverse could entice users with monetary rewards, and the pushbacks that could come with it. Photo illustration: Josephine Chu

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Appeared in the June 16, 2022 print edition as “Gates Says Crypto Based on ‘Greater Fool Theory'”.

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Post expires at 2:38pm on Monday June 27th, 2022