Microsoft co-founder Bill Gates made his opinion on cryptocurrencies and NFTs clear during the TechCrunch Summit on 14 June 2022.
He said that the concept of NFT and crypto are 100 percent based on the 'greater fool theory’ and that he prefers investing in assets in which commodities are produced.
The greater fool theory suggests that you can sometimes make money through the purchase of overvalued assets if there is a 'greater fool' willing to buy it at an even higher price.
He also poked fun at the NFT fad and expressed his concern over the anonymity and lack of regulation in the crypto space.
“Obviously, expensive digital images of monkeys are going to improve the world immensely," he said in a sarcastic quip about the Bored Ape NFT Collection.
These statements came only a day after the crypto market witnessed a massive crash, with Bitcoin and Ethereum dropping 70 percent in price from their peak values.
The crash took place after Celsius Network, a crypto lending platform, became insolvent and froze withdrawals. In the days following the market meltdown, crypto firms have been laying off employees en masse as they struggle to stay afloat.
Gates Was Initially Enthusiastic About Crypto
Bill Gates has expressed his opinions on cryptocurrencies many times before. In a famous 2013 interview with Fox Business, Gates appeared alongside Warren Buffet, who said that Bitcoin was “rat poison."
In the same interview, Gates said that Bitcoin was a “tech tour de force” but also added that real currencies would always be under government regulation.
He later went on to express interest in blockchain technology and the concept of digital currency in the vein of philanthropy, mentioning the benefits that such technology could have in impoverished areas.
Despite his initial enthusiasm about the concept, Gates is skeptical of Bitcoin and other cryptos due to concerns about the lack of regulation and lack of “real value.”
This is not the first time that he has used the 'greater fool theory' to describe crypto investments.
In a 2018 interview with CNBC, Gates claimed that cryptocurrencies were not an asset class and that the purely speculative nature of investing in them proved that it was based on a greater fool theory. He also infamously said, “I would short it (Bitcoin) if there was an easy way to do it."
Following the sudden plunge in crypto prices, the bear market is expected to continue for the foreseeable future.
Trading companies and crypto exchanges are trying to cut costs as their revenues decline rapidly. With Bitcoin and Ethereum falling to their lowest prices since December 2020, it is likely that many have begun to share Bill Gates’ view.
(With inputs from TechCrunch, CNBC, and Fox Business)