Co-founder Bill Gates said he believes cryptocurrencies and NFTs are “100%” based on the big fool theory.
The 66-year-old billionaire was referring to the notion that overvalued assets will continue to rise because enough people are willing to pay high prices for them. He joked that “expensive digital images of monkeys” would “improve the world immensely.”
Mr. Gates, who for years has lampooned cryptocurrencies, said At a TechCrunch event in Berkeley, California on Tuesday, people bought cryptocurrencies and NFTs based on the idea that no matter what the price, it could sell for more because “someone will pay more than me.”
He said he wasn’t involved in “any of those things,” either short-term or long-term. Other wealthy investors and executives, including Warren Buffett and Jamie Dimon, have also expressed skepticism about cryptocurrencies. Mr. Buffett once called bitcoin “rat poison squared.”
NFTs, or non-fungible tokens, are digital proofs of the purchase of goods such as art, digital music, and sneakers. After rising in popularity, their demand seems to have plateaued recently. Rising interest rates have crushed long shots in financial markets, and NFTs are among the most speculative.
In referencing NFTs, Mr. Gates seemed to be commenting on a monkey from the Bored Ape Yacht Club’s 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 tumbled in recent days amid a broad global market rout, undoing much of the gains at the start of the pandemic as a wave of investors began betting on digital currencies.
The bitcoin price recently traded above $20,000 on Wednesday. It has lost more than two-thirds of its value since its all-time high in November, the fourth-worst sell-off in the cryptocurrency’s 13-year history.
Other waves of reckoning have swept through the cryptocurrency industry this week. Cryptocurrency exchange Coinbase Global Inc.
said it would cut nearly a fifth of its staff and crypto lender Celsius Network LLC, one of the largest crypto lenders, told users Sunday night it would pause all withdrawals, trades and transfers between accounts due to extreme market conditions. . The company has engaged a law firm to examine restructuring options.
Gates is the fourth richest person in the world with a net worth of $113 billion, according to the Bloomberg Billionaires Index. She wrote in a Reddit Q&A last month that he did not own any cryptocurrency.
“I like to invest in things that have a valuable return,” he said.
“The value of cryptocurrencies,” he added, “is just what someone else decides someone else will pay for them.”
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