It may be foolish to buy something expensive, but in certain situations the buyer believes that there is someone more foolish who will later buy from her at a higher price.
Roughly speaking, this is the definition of an expression commonly used in the stock market, the famous “The Fool’s Theory, associated with market bubbles. the tycoon bill Gates revisited this famous theory to throw more fuel on two topics that divide opinions: cryptocurrencies and NFT.
During an event promoted by the TechCrunch websiteGates described NFTs as follows: a 100% asset class based on a ‘fool’s theory’ that someone will pay more for it than I will”.
You know that old popular saying: Every day a rascal and a sucker leave the house. When the two meet, does anyone do business”? Well, Gates’ view of the bustling crypto market revolves around that saying.
The NFTs market brought light to a new approach in terms of exclusivity to the digital world, but, as usual, it got out of control, and many very dubious things were put in the same basket, trying to catch a piece of this pie.
We recently saw the case of the investor Sina Estavi who paid US$ 2.9 million to acquire the NFT, that is, the “property title”, on the first tweet, and now, this same “asset” is completely undervalued. Trading for $29.
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Estavi acquired it thinking that such a property would have a great appreciation, considering the fact that it was the first tweet posted. The investor even said that people will only realize in a few years what the real value of this tweet is, as happened with the Mona Lisa”.
The NFT seems to be trivializing the value, in terms of importance, that a given event represents. A disproportionate swelling in which the very participants of this market are making a mockery of.
Bill Gates says he doesn’t invest in NFT or any other crypto asset, and has defended the more traditional investment. “I’m used to asset classes, like a farm where they have production, or like a company where they make products”says Gates.
The legendary Microsoft co-creator even made fun of Bored Apes’ famous NFTs, (digital images of cartoon monkeys), bought by celebrities like Neymar, Madonna, Snoop Dogg, Justin Bieber, among others.. “Expensive digital images of monkeys” will “immensely improve the world”scoffed Gates.
Remembering that, in the case of Bored Apes, in addition to the digital asset on the art, buyers can also be members of clubs and have access to exclusive areas of BAYC. Even with the hype and glamour, these NFTs are also plummetingfollowing Bitcoin’s current downtrend.
History shows that even in the physical world, some translocated investments have turned into bubbles that seem like a fictional story. As the famous case of “tulip mania”which took place in Holland in the 1630s.
“Rich and poor poured more and more money into flowers, to the point where tulip bulbs cost the price of a house. A sailor who mistook a bulb for a tasty onion ended up in jail. Legend has it that when the market crashed in 1637, the economy suffered and some people committed suicide by throwing themselves out of the canals.explains Professor Adam Kucharski in the book “The Rules of Contagion.
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