There is a theory that investors in any type of asset can buy it without worrying about its valuation and other weighty values. Why? Because there will always be someone who will buy it at a higher price. It doesn’t matter if they think what they are buying is overpriced. They expect to make a profit because there will literally always be a bigger sucker willing to buy it more expensive. It is the basis of big fool theory (in English, The greater fool theory).
this is fair the theory that Bill Gates sees as the basis for the success of NFTs, against which he has charged in his participation in an event against climate change organized by TechCrunch. In his intervention, he has indicated that he prefers to invest in assets with tangible results. For example, factories or farms. Or in a company that develops tangible products.
Gates has hinted that he finds NFTs suspicious, noting that they are designed to “avoid taxes or any kind of government regulations«. He has also pulled irony when referring to those of the most famous creation project of these images, Bored Ape Yacht Club. He ironically has stated that it is obvious that «digital images of monkey faces are going to make the world a lot better. everyone agrees on it«. In addition, he has assured that he does not have cryptocurrencies. «Neither few nor many. None«.
Bill Gates tells us what he really thinks of Bored Apes at #TCClimate: pic.twitter.com/vBc8BaaTup
— TechCrunch (@TechCrunch) June 14, 2022
This is not the first time that Gates has shown skepticism about crypto assets. Already in February of last year, he stated in an interview that he was concerned that ordinary investors would buy Bitcoin. Especially since the value of cryptocurrencies is so volatile that it could sink with the statements of a prominent investor alone. Like the ones Elon Musk often does.
Then he already warned of what could happen. She believed that “there are people who get into this who may not have enough money«, and pointed out that, in general «if you have less money than elon you should probably be careful«. His warnings, as circumstances have since shown, were quite sensible. Despite the fact that Bitcoin did not stop rising then and reached a peak of $63,000 in April 2021. Afterwards its value fell drastically, only to rise again and reach $64,000 in November. But since then it has fallen off the cliff. Currently it is around $20,000. and it is immersed in a great crisis, which can cause it to continue to fall.
This latest fall is one of the last stages of the crisis that cryptocurrencies have been going through in recent weeks. Last May saw the total collapse of the stablecoin Terra and the failure of the cryptocurrency lending platform Celsius. Thousands of cryptocurrencies could collapse shortly. This week, due to the fall of Bitcoin, a cryptocurrency in which many investors had taken refuge, activities have been suspended on several cryptocurrency exchange and management platforms. Just yesterday several companies, including Binance, have announced thousands of layoffs. Meanwhile, the cryptocurrency market is down from $1 trillion.
The price of NFTs has also experienced a decline deep. Some of the main projectslike the aforementioned Bored Ape Yacht Club, have lost more than half their value. Meanwhile, trading volume is up as buyers look to snap up digital assets at rock-bottom prices. Perhaps if they do, they will later look for others who will buy them more expensively. They are the ones Gates mentioned. Only the number of fools is not infinite. When the fools run out, and there is no more money, the value of the assets usually falls off the cliff. And its last owner suffers the consequences.
Photo: The Aspen Institute
