Bill Gates’ harsh criticism of cryptocurrencies and NFTs

BBC

Editor – BBC News World

posted on 06/17/2022 14:36

Bill Gates' criticism was made during a talk organized by TechCrunch - (credit: Getty Images)


Bill Gates’ criticism was made during a talk organized by TechCrunch – (credit: Getty Images)

In finance, the “foolishest theory” starts with an investor doing something stupid in the hope that someone will later decide to do something even more absurd.

The first buyer pays an inflated amount of money for a good that he will soon put up for sale at an even more exorbitant price in an attempt to find someone even more “silly” to buy it.


In this dangerous game, what is traded can be tulips — as happened in the first big financial bubble in world history in the first half of the 17th century — or, according to Bill Gates’ latest statements, bitcoins.

The Microsoft founder stated at a conference in Berkeley, California, that the cryptocurrency and NFTs (digital tokens) market is based “100%” on the most foolish theory.

This is because, according to this theory, it is possible for investors to make a profit by buying very expensively and then selling to another investor.


This entire cycle works without anyone stopping to think about the real value of the asset — and according to experts, many investors fall into this trap, probably without knowing it.

Bitcoin

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Bitcoin has lost more than half its value so far this year

The price of gasoline may go higher and higher, but oil is always backed by its utility. It serves something.

Gates added that he prefers to invest in companies that create real products rather than services whose “anonymity is used for tax evasion,” he said in reference to the most famous cryptocurrency.

According to him, people bought cryptocurrencies and NFTs regardless of the price and convinced that they could sell more expensively because “someone is willing to pay more for it than I am”.

He also stated that he had never invested in this market.

Warren Buffett

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Warren Buffett has already claimed that cryptocurrencies are one of the worst bubbles of all time

Other wealthy investors and executives, including Warren Buffett and Jamie Dimon, have also expressed skepticism about cryptocurrencies.

Buffett even called bitcoin “the squared rat poison”.

Gates was also ironic about the value of NFTs, or non-fungible tokens.

They are certificates of ownership of virtual or physical assets often used in the world of digital art or music. After becoming extremely popular last year, its demand seems to have stabilized recently.

“Obviously expensive digital images of monkeys are going to make the world a lot better. It’s amazing,” Gates said sarcastically on the forum.

Bored Apes

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Bored Apes, released in April 2021, were generated from programming

The 66-year-old billionaire philanthropist was referring to the Bored Ape Yacht Club digital art collection, a limited edition of 10,000 unique pieces of a monkey image with minor variations that have sold for thousands of dollars.

But now that the world economy is going through a bad moment, investors prefer to put their capital in less risky investments and avoid more speculative bets, such as cryptocurrencies and digital certificates, two markets that do not have legal protection.

Bitcoin accumulates drops of more than 50% in 2022, while ethereum has lost 69% of its value.

The value of the monkeys’ NFT also dropped by more than half.

Bitcoin and dollar

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All this suggests that the chain to find the “silliest” has been broken, affecting many other parts of the market.

Just this week, the Celsius platform, one of the largest digital currency lending companies with a key role in the world of decentralized finance, decided to protect itself from “extreme market conditions” by freezing the accounts of its 1.7 million users and imposing a kind of “corralito” to the customers.

In the same vein, Binance, the world’s largest cryptocurrency transaction platform, also had to “stop” bitcoin withdrawals for a few hours, while Coinbase Global, another major platform, announced that it would lay off almost a fifth of its staff.

‘This text was originally published in https://www.bbc.com/portuguese/geral-61837761


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About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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