At this week’s climate change event, Microsoft co-founder Bill Gates said he believes cryptocurrency and the NFT are “100% based on the biggest hoax theory.” Referring to the NFTs of the Bored Ape group, Gates mocked cryptocurrencies and non-fungible tokens, saying that it is easy to see how “expensive digital images of monkeys will greatly improve the world.” The tech billionaire then added that he is “not involved” in cryptocurrency: I’m neither tall nor short in any of these things.
NFTs are symbols that cannot be exchanged with each other. They are often presented as a way to prove ownership of digital assets such as artwork or sports collectibles. But their critics believe they are the subject of excessive hype and potentially dangerous to the environment, given the energy-intensive nature of cryptocurrencies (the Bitcoin network alone consumes the equivalent of Argentina’s annual energy needs). Most of the NFTs are built on the Ethereum (ETH) blockchain, the second largest cryptocurrency.
On Tuesday, Gates said NFTs are “100% based on the biggest trick theory,” referring to the idea that overvalued assets will rise in price when there are enough investors willing to pay more for them. Specifically, in finance and economics, the “greatest fool theory” is the practice in which people invest in overvalued assets, regardless of their true intrinsic value, in the hope that someone else will come along and pay more for those assets. But the markets, driven by the belief that there will always be someone willing to pay more, eventually ran into a roadblock.
However, when no one is willing to pay a higher price, the prices of these digital assets can drop rapidly, leaving investors to “keep the bag” of worthless assets. For example, the issue arose in the case of the NFT’s first tweet by Jack Dorsey, the co-founder of Twitter. NFT was purchased for 2.9 million in March 2021, and the value of the NFT for the first tweet in history was just $10,000 in April 2022. The buyer at the time is struggling to find someone to “revamp”.
Gates said he prefers investing in assets with tangible results, such as farms or factories, “or businesses where they make products,” and that he has no position in cryptocurrencies or NFTs. You’re used to asset classes like a farm where they have production, or like a business where they make products. Regarding cryptocurrencies, I am not involved in this field. I’m neither tall nor short on any of those things, he said, noting that he was also wary of assets designed to “avoid taxes or any kind of government rule.”
It’s clear that expensive digital images of monkeys will greatly improve the world,” Gates joked, referring to the NFT’s flagship project, Bored Ape Yacht Club. He has previously criticized cryptocurrencies and NFTs for their lack of real value. He said during a question-and-answer session On Reddit in May, the value of a cryptocurrency is only what someone else decides to pay for it, so there is no adding to the community like other investments.In an interview from February 2021, he was concerned about the risks of ordinary investors buying bitcoins.
He said he was particularly concerned that the value of the cryptocurrency was extremely volatile and could collapse based on a tweet from a prominent investor, such as Elon Musk. I think people who don’t have a lot of money to spend get caught up in this madness. Gates said in 2021. Gates’ warnings about volatility have come true. When he spoke in 2021, the price of bitcoin was in full swing and reached $63,000 in April of the same year.
Then it experienced a stunning decline, before climbing to an all-time high of more than $64,000 last November. Today, bitcoin is worth just $21272. Once thriving crypto companies such as Coinbase, Crypto.com and BlockFi are laying off employees due to low trading volumes. Coinbase has announced that it will lay off more than 1,100 employees, or 18% of its global workforce, this year as part of a cost-cutting plan. Falling cryptocurrency values are also sinking projects like crypto lender Celsius Network.
Projects such as Terraform Labs’ algorithmic stablecoin have also collapsed. Similarly, NFT prices have also fallen sharply. Some of the larger projects, such as the Bored Ape Yacht Club (BAYC) mentioned above, have seen their value halve or more. According to CoinMarketCap, the NFT Index, which tracks the performance of eight popular NFT-related coins, fell by 30% during the week. Moreover, according to Decrypt, the base price of NFT has fallen by 78% since the end of April.
However, more and more people are seeing NFTs as a bargain amid the crypto crash, with the OpenSea NFT market increasing trading volume by 173% over the past day. As Gates thinks, investors might be buying up the craziest theory of NFT, thinking there are other dupes out there to buy those assets.
Source: Bill Gates speaking at the Climate Change event
What do you think about it?
What do you think of Gates’ stance on NFTs and cryptocurrencies?
What do you think of the expression Gates uses to qualify NFTs and cryptocurrencies?
Do you think interest in this digital asset is fading away?
Do you think the market will continue to crash?
Bought for 2.9M, First Tweet In History Valued At Just $10,000, Shows The Craze About This Digital Assets Is Fading
Coinbase employs 1,100 employees, 18% of its workforce, as CEOs prepare for crypto winter, CEO Brian Armstrong admits the company has grown too quickly
About 90% of NFTs will be worthless in 3-5 years, warns Coinbase co-founder Fred Ehrsam
It’s hard for the average person to understand how useless NFTs are, according to Holden Shearer, a video game designer.