Bill Gates believes that crypto is an asset class that is “100% based on the Greater Fool Theory”.
Businessman and Microsoft founder Bill Gates recently took part in a TechCrunch talk about climate change. Gates said that NFTs and cryptocurrencies are based on the “Greater Fool Theory”. The billionaire made this statement in connection with the current crypto winter and the popular Bored Ape Yacht NFT collection.
Bill Gates and Digital NFT Monkeys
According to the Greater Fool theory, overvalued assets rise in price when someone is found who is willing to pay the price for them.
Gates sarcastically stated that ”expensive digital images of monkeys” would certainly “improve the world immensely”. Of course, this was a reference to the famous NFT collection of the Bored Ape Yacht Club. The billionaire also mentioned the crypto market, but said that he was “not involved in any of this”.
Gates stressed that he would prefer to invest in facilities with tangible results, such as in the production of products.
What is the “Greater Fool Theory”
The theory says that financial bubbles arise as a result of the dogmatically optimistic behavior of market participants (the most stupid). They buy overvalued assets in the expectation that they will be sold to speculators.
Gates associates this phenomenon with NFTs, which, in his opinion, have no intrinsic value. Even in crypto markets, according to Gates, greedy buyers are always greedy, even when assets are overvalued. This will only create a structure in which the first fool will try to sell the worthless asset he bought to a more stupid one.
The process repeats, almost like a loop, until the system breaks down. The last row of fools (the most stupid ones) suffer the most damage – as in the case of a ponzi scheme.
Carnage in the NFT and Crypto Market
There have been strong sell-offs in both the crypto and NFT markets in recent months.
Crypto Crash: A Picture of BeInCrypto.com
The price of the popular Bored Ape Yacht Club NFT collection (BAYC), to which Bill Gates alluded, fell by 78% since April. At that time, the price was around 429,000 US dollars, currently the price is 80,000 US dollars. In addition, Google searches are also declining sharply.
As it stands, we are actually in a strong crypto winter. Both the Bitcoin price and the Ethereum price have repeatedly reached new lows in recent weeks.
Many experts claim that it might be worth continuing to buy crypto at the low prices, as prices will rise again in the future. From the point of view of Bill Gates, this is exactly the trap that many participants in the crypto market could fall for.
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