Microsoft co-founder Bill Gates said he thinks cryptocurrencies and NFTs are “100% based on greater fool theory.” Bill Gates is not a fan of cryptocurrencies or non-fungible tokens. As criticisms of digital assets thicken worldwide, billionaire Bill Gates dismissed cryptocurrency projects such as nonfungible tokens (NFTs) as shams “based on the greater fool theory” at a climate conference.
Speaking at a TechCrunch talk on climate change Tuesday, the billionaire Microsoft co-founder described the phenomenon as something that’s “100% based on greater fool theory,” referring to the idea that overvalued assets will go up in price when enough investors are willing to pay more for them.
“Expensive digital images of monkeys are going to improve the world immensely,” the Microsoft billionaire said while speaking at an event in California hosted by TechCrunch. The billionaire said he’s neither long nor short the asset class. “I’m used to asset classes where they have output, or like a company where they make products,” Gates said adding that he is not involved with cryptos and also is “not long or short any of those things.”
Gates has criticized crypto before, sparring with Elon Musk last year over whether Bitcoin is too risky for retail investors and the environmental harm of mining coins. Cryptocurrencies tumbled sharply this week after Celsius, a crypto lending firm, paused all account withdrawals. The debacle has fueled fears of a looming insolvency event for Celsius — and possible knock-on effects for other parts of the crypto market. For its part, Celsius says it’s “working around the clock for our community.” Gates joked that “expensive digital images of monkeys” would “improve the world immensely,” referring to the much-hyped Bored Ape Yacht Club NFT collection.
According to estimates, the cryptocurrency market saw its total market cap drop by roughly 12% on Monday to just $980 billion. The sector has now seen more than $2 trillion in losses since its November 2021 peak. In a ‘Ask Me Anything’ exchange on Reddit last month, the Microsoft co-founder revealed he had not distributed some of his wealth into cryptocurrencies. Gates further explained that he likes investing in things that have “valuable output,” arguing digital assets aren’t his cup of tea. “I like investing in things that have valuable output. The value of companies is based on how they make great products. The value of crypto is just what some other person decides someone else will pay for it so not adding to society like other investments,” Gates said on the Reddit exchange.
NFTs are tokens that can’t be exchanged for one another. They’re often touted as a way to prove ownership of digital assets like art or sports collectibles. But critics see them as overhyped and potentially harmful to the environment given the power-hungry nature of cryptocurrencies. Many NFTs are built on the network behind Ethereum, the second-biggest token. The battered crypto world was already licking its wounds following the collapse of UST — a so-called “stablecoin” that was meant to be worth $1 — and luna, its sister token. At their height, both cryptocurrencies were worth a combined $60 billion.
Bitcoin was last trading at $21,107 Wednesday, down 7% in the last 24 hours. The world’s biggest cryptocurrency has erased over half of its value since the start of 2022.
