Microsoft co-founder Bill Gates says crypto is an asset class that is 100% based on the Greater Fool Theory. The billionaire also mocked Bored Ape NFTs, stating: “Obviously, expensive digital images of monkeys are going to improve the world immensely.”
Microsoft co-founder Bill Gates talked about cryptocurrency and non-fungible tokens (NFTs) at this year’s Techcrunch Sessions: Climate 2022 event Tuesday.
Referring to the Bored Ape Yacht Club NFTs, Gates sarcastically said: “Obviously, expensive digital images of monkeys are going to improve the world immensely. That’s so incredible.”
He clarified, “I’m used to asset classes like a farm where they have output or a company where they make products,” describing crypto as:
An asset class that’s 100% based on some sort of Greater Fool Theory that somebody’s going to pay more for it than I do.
The Greater Fool Theory suggests that there will always be a greater fool in the market ready to pay a price based on a higher valuation for an already overvalued investment. However, eventually, when there’s no one left willing to pay a higher price, asset prices can decline sharply, leaving investors holding worthless investments.
Gates stressed that he is not getting involved in any asset that “at its heart has sort of this anonymity that you avoid taxation or any sort of government rules about kidnapping fees or things.” He emphasized:
I’m not involved in that. I’m not long or short in any of those things.
The billionaire also claimed that the digital banking efforts he supports through his philanthropic foundations are “hundreds of times more efficient” than cryptocurrencies.
The Microsoft co-founder has long been a critic of cryptocurrency and bitcoin. In May, he said during a Reddit AMA that he does not own any cryptocurrency. “I like investing in things that have valuable output,” the billionaire explained. “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.”
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