Bill Gates, a co-founder of Microsoft, claimed that the greater fool hypothesis underlies investments in cryptocurrencies like nonfungible tokens (NFTs).
At a climate conference, a billionaire speaker expressed skepticism about the potential benefits of costly digital photos of monkeys. Gates defended the programs he supports through his charity foundations, asserting that digital banking is more successful than cryptocurrency.
What is “Greater fool theory”?
According to this argument, prices rise because people can sell overpriced securities to a bigger fool whether or not they are overvalued—until there are no more fools. The idea holds that when investing in an asset, investors are most likely to ignore valuations, earnings reports, and any other data other from the fundamentals, which include familiarity with and ownership in the company.
What Gates is saying
Gates has always maintained a position as someone that likes investing in things with valuable output. Gates characterized cryptocurrencies and NFTs as market-driven by sentiment. The billionaire has also warned severely warned against investment in crypto as well as about the environmental impact of crypto.
Gates also cautioned individuals considering investing in the cryptocurrency industry to exercise caution.
I do think people get bought into these manias, who may not have as much money to spare, so I’m not bullish on Bitcoin, and my general thought would be that, if you have less money than Elon (Musk), you should probably watch out,” Gates said.
-Punch.
