Founder and former Microsoft CEO Bill Gates was a guest at TechCrunch’s climate change conference. One of the questions concerned his relationship with the NFT (Non-fungible token), and it must be said that Gates certainly did not take napkins during his answer.
The NFT phenomenon described as something that is “One hundred percent based on the theory of the bigger fool”. He thus referred to the idea that overvalued assets would rise in price when there were enough (stupid) investors who were willing to pay a higher price for them.
Gates didn’t deal with it
Gates also joked sarcastically that “Expensive digital images of monkeys” they could “Vastly improve the world”thus referring to the widely publicized collection of the NFT Bored Ape Yacht Club. “I’m used to asset classes … like a farm that produces something, or a company that makes products,” Gates said. As for cryptoactive “So I’m not involved,” he added.
According to Gates, the NFT is a financial concept in which even overpriced assets can earn, if you find a bigger fool to sell them. He is also suspicious of the assets he aims at “Avoid taxation or any government rules”. He himself prefers investing in assets with tangible outputs.
This is not the first time Gates has been skeptical of cryptocurrencies. In an interview last February, he feared the dangers posed to ordinary investors when buying bitcoin, especially when the value of the cryptocurrency was so volatile and could fail due to the tweet of a major investor such as Elon Musk.
“I think people who don’t have to have that much money are lured into these mania.” said Gates in 2021. “My general advice would be that if you have less money than Elon, you should probably be careful. “
Investment or a pyramid scheme?
Gates’ volatility warning was in place. At the time, the price of bitcoin rose sharply to $ 63,000 in April. After that, it dropped dramatically to half the value, but in November it rose again to a historic high of more than $ 64,000. Since then, the price has fallen again, and at the time of writing, it is trading just above $ 20,000.
NFT prices fell similarly. The value of some of the biggest projects, such as the aforementioned Bored Ape Yacht Club, fell by more than half. At the same time, the volume of transactions has increased as buyers try to acquire digital assets at the lowest prices.
NFTs are tokens that cannot be exchanged. They are often promoted as a way to prove ownership of digital assets, such as art or sports collectibles. However, critics consider them exaggerated and potentially harmful to the environment due to the energy-intensive nature of the technology. Many NFTs are built on the network behind the cryptocurrency ethereum.
Gates isn’t always right, but in this case, he hit it off. Although NFTs are compared to the art market – where investments gain in value with time and cultural appreciation – the reality seems closer to the standard pyramid scheme. For an investor, the value of the NFT or cryptocurrency only increases if more and more people join the purchase at a later stage of the game than he did.