Bill Gates doubts the utility of most crypto and NFTs

Crypto is “100% based on greater fool theory,” the tech billionaire boldly stated during his speech at TechCrunch’s climate conference.

The billionaire Microsoft co-founder in his talk referenced the idea that overpriced assets with no real value can grow big as long as there are investors who are ready to jump in. Gates added that he isn’t involved in crypto and mocked the Bored Ape Yacht Cub NFT collection, joking that “expensive digital images of monkeys” would “improve the world immensely.”

Both equity and crypto markets spiraled downwards on Monday in anticipation of the Fed’s hawkish rate hike meant to keep the rampant inflation in line with a country’s target of 2%. The other blow to crypto was delivered by the Celsius fallout triggering a panic selloff as the memory of the Terra/Luna crash is still fresh among the investors.

After the cryptocurrency market capitalization had dropped to less than $1 trillion from its November 2021 peak of $3 trillion, the voices of crypto skeptics became louder and more frequent while crypto proponents were getting more defensive. And billionaires, too, seem divided on whether cryptocurrencies should be given a second chance.

Bill Gates remains consistent in his view on crypto. In his interview from February 2021, the billionaire told Bloomberg Technology that retail investors should be cautious around Bitcoin, as it lacks regulation and can be easily manipulated by bigger players like Tesla CEO Elon Musk.

“Elon has tons of money, and he’s very sophisticated, so I don’t worry that his Bitcoin will randomly go up or down,” Gates said. “I do think people get brought into these manias who may not have as much money to spare, so I’m not bullish on Bitcoin.”

“I like investing in things that have valuable output,” the billionaire confessed during the AMA session on Reddit less than a month ago. “The value of crypto is just what some other person decides someone else will pay for it so not adding to society like other investments,” he added.

In contrast, MicroStrategy CEO Michael Saylor remains bullish about crypto, despite the threat of the margin call on his firm’s $205m bitcoin-backed loan. Previously, the billionaire said he doesn’t believe that Bitcoin will ever drop to zero, citing its growing adoption by governments globally.

Saylor stated that BTC is "obviously better than gold and everything that gold wants to be," adding that if it was worth only what gold is worth, "Bitcoin would be only five hundred thousand USD per coin." He also expressed a firm belief that the “digital gold” will eventually reach $1 million.

Binance’s CZ was more cautious, although remaining generally optimistic. “While lots of projects and exchanges are going to struggle through the bear market, many will come back stronger than before,” he tweeted on Wednesday. Zhao also emphasized that Binance is one of the very few crypto firms that continued the hiring spree instead of laying off its employees.

Since cryptocurrencies are tightly correlated with the stock market, further price declines could be expected as long as inflation remains a risk. Although the investors who are entering the market now are lucky to buy at the bottom, the rest isn’t doing well through the sudden crypto winter. To survive this bear trend, it’s important to accurately assess your risk tolerance and employ the dollar-cost averaging strategy, as many experienced traders recommend. Stay safe and keep a cool head!