Bill Gates known to be an opponent of cryptocurrencies and non-fungible tokens.
Speaking at a TechCrunch lecture on climate change on Tuesday, 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 value when enough investors are ready to pay more for them.
Gates said that “expensive digital photos of monkeys” will “immeasurably benefit the world,” referring to the much-touted Bored Ape Yacht Club NFT collection.
NFTs are tokens that cannot be swapped for other tokens. They are frequently promoted as a means of proving ownership of digital assets such as art or sports items.
However, given the power-hungry nature of cryptocurrencies, many regard them as overhyped and potentially damaging to the environment. Many NFTs are constructed on the Ethereum network, which is the second-largest token.
“I’m used to asset classes … like a farm where they have output, or like a company where they make products,” Gates said.
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. The saga has stoked suspicions of a looming insolvency event for Celsius, as well as potential spillover implications for other areas of the crypto industry. Celsius, for its part, 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 bruised crypto community was already nursing its wounds. Both cryptocurrencies were worth a total of $60 billion at their peak.
Bitcoin was last trading 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.
(Adapted from CNBC.com)