Cryptocurrencies and non-fungible tokens do not appeal to Bill Gates.
The billionaire Microsoft co-founder described the phenomena as “100% based on greater fool theory,” referring to the premise that overvalued goods will rise in price when enough investors are prepared to pay more for them, at a TechCrunch talk on climate change on Tuesday.
Gates said that “expensive digital images of monkeys” would “improve the world immensely,” referring to the hotly anticipated Bored Ape Yacht Club NFT collection.
NFTs are non-transferable tokens that can’t be traded for one another. They’re frequently promoted as a means of proving ownership of digital items such as art or sports memorabilia. However, given the power-hungry nature of cryptocurrencies, some believe they are overhyped and potentially damaging to the environment. Many NFTs are based on the network that supports ethereum, the second-largest cryptocurrency.
“I’m used to asset classes … like a farm where they have output, or like a company where they make products,” Gates explained.
As for crypto, “I’m not involved in that,” Gates added. “I’m not long or short any of those things.”
This week, cryptocurrency prices plummeted after Celsius, a crypto lending service, halted all account withdrawals. Fears of a potential insolvency event for Celsius — and possible knock-on implications for other sectors of the crypto market — have been stoked by the catastrophe. Celsius, on the other hand, claims to be “working around the clock for our community.”
Following the collapse of UST — a so-called “stablecoin” that was supposed to be worth $1 — and luna, its sister token, the crypto industry was already licking its wounds. Both cryptocurrencies were worth a total of $60 billion at their height.
Bitcoin was last seen at $21,107 on Wednesday, down 7% in the previous 24 hours. Since the beginning of 2022, the world’s largest cryptocurrency has lost more than half of its value.