September 25, 2022

Bill Gates Criticizes Crypto and NFTs

crypto

Bill Gates is not going to jump on the crypto and NFT bandwagon. The tech billionaire expressed his sentiments about cryptocurrencies and non-fungible tokens (NFTs) last week when he talked about climate change at a TechCrunch talk. The co-founder of Microsoft Corp. said that he believes they are based on ‘100% greater fool theory’. Essentially, he was talking about the concept that prices of overvalued assets will rise when there are enough people ready to pay for them.

Gates Does Not Like the Asset Class

During the discussion, Gates mentioned the NFT collection of the Bored Ape Yacht Club that has garnered a lot of hype. He said that he could not see how digital images of monkeys could help in improving the world. The concept of NFTs is such that it is not possible for anyone to exchange them for one another.

As a matter of fact, NFTs gained popularity because they could be used for proving ownership of a digital asset, like a sports collectible, or art. However, critics believe they are overhyped and because cryptocurrencies are energy-intensive, they consider them harmful for the environment as well. A lot of NFTs that are available in the market are developed on the Ethereum network, which launched the second-largest token called Ether.

Gates disclosed that he was not involved in cryptocurrencies either. He said that he was not long or short on these digital currencies. Instead, the tech guru said that he preferred old-fashioned and traditional investing. He gave examples of a company that is actually making products, or a farm where output is generated.

Crypto Market is Crashing

The comments from Bill Gates about cryptocurrencies and NFTs come at a time when the crypto market is dealing with a lot of turmoil. The collapse of the UST stablecoin last month had already seen the market values plummet significantly. The UST stablecoin and its sister token, Luna, were valued at $60 billion in total and their crash and resulting tumble pushed the value of the crypto space under $1 trillion.

The market was already battered when Celsius Network announced that it was freezing account withdrawals that sent investors into a frenzy. There are talks about the company’s insolvency and fears that others could also follow the same route, especially those that had been exposed to the TerraUSD stablecoin.

Crypto companies had already been laying off their employees due to the turmoil in the market, which included prominent names like Coinbase, Gemini and BlockFi. Bitcoin’s value has declined to lows that had last been seen in December 2020 and further declines are predicted.

Gates Has Criticized Crypto Before

This is not the first time that Bill Gates has spoken against cryptocurrencies. Back in 2021, he had given an interview to Bloomberg in which he said that he was not bullish on Bitcoin. The billionaire said that Tesla and Elon Musk investing in the crypto was something entirely different and other investors should not do the same. He said that not everyone has money to spare to buy into such manias.

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