Microsoft co-founder Bill Gates is pretty sure that crypto holders are fools. He claimed that cryptocurrencies and NFTs are “100% based on greater fool theory.” What does he mean?
The Crypto market is collapsing right now.
And all the people who hated crypto today are glad to say that they were right about it.
The once again period of investors’ panic is great for billionaires who predicted soon death of digital assets. Bill Gates is among them.
Microsoft co-founder always was around bad crypto forecasts. Now he is insulting those who possess crypto.
And actually, Gates has a right to it.
“Greater fool theory”
Speaking at a TechCrunch talk on climate change this week Bill Gates said that the crypto phenomenon is ‘100% based on greater fool theory’.
This refers to any overvalued assets that go up in price when there are a lot of other investors willing to pay more for them.
Besides that American business magnates also mocked NFTs by saying that ‘expensive digital images of monkeys would improve the world immensely’. Yeah, that was about the much-hyped and idling Bored Ape Yacht Club NFT collection.
“I’m used to asset classes… like a farm where they have output, or like a company where they make products. As for crypto, I’m not involved in that. I’m not long or short any of those things,” Gates outlined.
Earlier Microsoft co-founder said in a discussion with Elon Musk that Bitcoin is too risky for retail investors and it has the environmental harm of mining coins.
Though, Gates defended digital banking efforts supported by his philanthropic foundations by saying that this is ‘hundreds of times more efficient than cryptocurrencies’.
“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 Ask Me Anything last month.
Once being good mates with Gates, Warren Buffett has also praised the mighty traditional finances and stood up against crypto.
His arguments are pretty much the same: digital assets haven’t anything behind it and their price consist of only the investors’ interest.
But unlike Gates Buffett finally decided to invest some of his billions in the new Bitcoin-friendly digital bank. And some companies in his portfolio also have connections with digital assets.
That’s funny, but right before the current crypto market drop Value investor and Warren Buffett’s disciple Mohnish Pabrai said the previous market correction doesn’t mean the end of crypto winter.
Pabrai forecasted that the worst is yet to come for digital assets and that the ‘$3 trillion industry would disappear, hurting a lot of people’.
At the time of writing, we have a general crypto market cap of a bit more than $906 billion. Which is three-time less than the maximum, reached in November 2021.
So, is the worst yet to come?