Bill Gates Ridicules NFTs, Says They're Based on 'The Greater Fool Theory'
Despite the hype around NFTs, Microsoft Co-Founder Bill Gates has a pretty low opinion of them, dismissing non-fungible tokens as an asset based on "the Greater Fool Theory."
Gates made the comment during a Tuesday TechCrunch event(Opens in a new window), where he was asked about his thoughts about investing in cryptocurrencies and NFTs, which essentially act as digital collectibles people can buy and sell.
Gates first expressed doubts about NFTs bringing any value to society. “Obviously, expensive digital images of monkeys are gonna improve the world immensely,” he said sarcastically, referring to the Bored Ape NFTs.
Gates said he typically invests in asset classes, such as farms or companies, that produce output or products. He added: "To have an asset class that’s 100% based on a sort of Greater Fool Theory that somebody’s going to pay more for it than I do, and where it has, at its heart, this anonymity that you avoid taxation or any sort of government rules about kidnapping fees or things...I’m not involved in that. I’m not long or short of any of those things.”
The Greater Fool Theory(Opens in a new window) refers to buying an investment simply because you think someone else will buy it from you at a higher price, regardless of the asset’s quality. The theory often comes up amid a burgeoning market bubble; investors of all kinds will typically rush in and buy up the relevant assets, even though they may be grossly overpriced.
It’s not the first time Gates has criticized cryptocurrencies. But by referencing the Greater Fool Theory, he’s implying that anyone investing in virtual currencies and NFTs is being taken for a ride. His comment also comes after a recent crypto crash, which has resulted in major losses
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