Cryptocurrencies or non-fungible tokens are based on a greater fool theory, said Microsoft co-founder Bill Gates.
“100% based on greater fool theory,” Gates said speaking at a TechCrunch talk on climate change on Tuesday, where he questioned the idea that those digital assets will make money when there are enough investors willing to pay more for them.
“I do think people get bought into these manias, who may not have as much money to spare,” Gates said. “So, I’m not bullish on bitcoin.”
The billionaire joked that “expensive digital images of monkeys” can “improve the world immensely,” referring to the popular Bored Ape Yacht Club, one of the top sellers in the NFT market.
NFTs are digital assets that can’t be exchanged and are increasing in popularity among celebrities using them in their social media accounts. However, critics have been questioning their true value and environmental impact, since they rely on the energy-intensive cryptocurrencies.
“I’m used to asset classes … like a farm where they have output, or like a company where they make products,” Gates said.
Cryptocurrencies plunged this week with Celsius, a crypto lending firm, pausing withdrawals. Bitcoin was last trading at $21,100 on Wednesday. The world’s biggest cryptocurrency has lost half of its value since the start of 2022.