After the rapid and sharp erosion of wealth observed in the crypto, Microsoft co-founder Bill Gates criticized the digital asset class and clearly rejected initiatives such as non-functional tokens (NFTs), and he believes cryptocurrencies and NFTs are “100%” based on the bigger fool theory, referring to the idea that investors may profit from worthless or overpriced assets if others are ready to pay more for them. So, in the end, Bill Gates is not in favor of digital currencies and NFT.
Nonfungible tokens, or NFTs, are electronic certificates of purchase for items such as art, digital music, and footwear. After a recent surge in popularity, their demand appears to have leveled out. Across the financial markets, rising interest rates have crushed risky bets, and NFTs are among the most speculative.
Bill Gates Slams Cryptos & NFTs: 100% Based On The Bigger Fool Theory
His remarks come as bitcoin and other cryptocurrencies have fallen precipitously in recent days as a result of a widespread global market sell-off, wiping away most of the gains made at the start of the week when plenty of investors rushed into digital currencies.
Gates also said he was “neither tall nor short” about digital currency. He also criticized NFT technologies for boring monkeys, saying “expensive digital images of monkeys” benefit the world.
Gates, on the other hand, favors traditional investment. He said, “I’m a farm with production or a company used to asset categories like artisan products. Gates added that consumers bought cryptocurrencies and NFTs hoping to sell them for a higher price because “someone is going to pay more than me,” which is a vague concept.
He got into a heated exchange with Elon Musk last year when he said Bitcoin was too risky for regular investors and pointed out the negative environmental impact of mining the currency.
Elon Musk, a crypto enthusiast, said on Twitter that anyone who wants to buy Tesla products may do so with Dogecoin. He completely supports Cryptos and NFTS, quite opposite to Bill Gates.
Affluent investors and CEOs like Warren Buffett and Jamie Dimon have expressed misgivings about cryptocurrencies. Warren Buffett has referred to bitcoin as “rat poison squared.”
His comments came as the price of Bitcoin and other cryptocurrencies plummeted. In November 2021, Bitcoin hit an all-time high of $69,000. Since then, the most valuable cryptocurrency in the world has lost two-thirds of its value, falling below $23,000 on Tuesday. It has lost almost a quarter of its value since Friday.
The cryptocurrency downturn coincides with the downfall of a number of stable coin and staking projects, including Luna, TerraUSD, and, most recently, Celsius Network, which froze withdrawals on its network over the weekend, wiping out billions of dollars in market value.
More settlement waves are sweeping the Bitcoin sector this week. Crypto exchange Coinbase has announced that it will lay off 18% of its workforce as the digital currency market continues to deteriorate.
Due to unusual market conditions, cryptocurrency lender Celsius Network LLC, a leading cryptocurrency lender, suspended all withdrawals, trades, and transfers between accounts on Sunday evening. He was referred to a law firm to review the restructuring plan.
Mr. Gates is the world’s fourth-richest individual, with a net worth of $113 billion. He said he didn’t possess any cryptocurrencies in a Reddit Q&A session last month.
He stated, “I prefer to invest in products that have a great return on investment.” He went on to say, “The value of crypto is just what someone else determines someone else would pay for it.”
After the disaster in the digital asset market worsened, owing to mounting inflation fears, geopolitical danger, the Terra debacle, and recession fears, the crypto market has been on the radar of global investing gurus.
The crypto sector has lost $2 trillion in notional wealth in just eight months, with the overall market capitalization of all crypto assets falling below $1 trillion from $3 trillion in November 2021. Similarly, the rates of NFT have also dropped down, and projects like the Bored Apes Club have decreased to half in value.
NFTs And CrytpoCurrency Drop
Over 73% of NFTs had only one transaction in the previous three months, according to OpenSea. This means that most investors who have tapped into digital asset opportunities have been unable to resell their NFTs. To put it another way, they’ve been stuck with something that no one wants.
Popular, expensive games dominate the non-fungible token market. As of August, 3% of all NFT collections represented 97% of all funds placed on the market, totaling more than $ 3 billion.
NFT collectors spend between $10,000 and $100,000 every transaction, accounting for the majority of sales earnings. Collectors spent 37 billion USD in NFT marketplaces by May 1, 2022, nearly as much as last year.
Retail investors suffer the brunt of volatility until NFT collectors become active in September 2021. Some question this after trading volume and NFT prices fell drastically last year. If the NFT market collapses, the ramifications might be massive.
Twitter founder Jack Dorsey’s re-auctioning of the world’s first tweet highlighted the NFT market’s problems. In 2022, the NFT, which sold for $2.9 million in 2021, received a maximum bid of $20,000. The auction had to be canceled in the end.
Insiders pitched NFTs as a pleasant way to get started with crypto last year, attracting many new buyers. If they’ve been burned by a big drop, it may be hard to win them back. A new analysis demonstrates that Bitcoin’s slump isn’t just related to tech stocks, but also other crypto sector issues. The market is treating cryptocurrencies like any other risky, speculative investment. Because NFTs are the second most speculative and leveraged industry, they will drop after the UST meltdown.
The majority of NFT owners, according to the research, are companies that intend to resell them for a profit. The cost of several of the most well-known NFTs has dropped considerably. The $2.9 million buyers of Jack Dorsey’s first tweet NFT are having trouble selling it, with the highest price hovering around $21,000.Prices at the Bored Ape Yacht Club have just dropped.
When the dot-com bubble burst, private tech investment took nearly a decade to recover. Retail investors also shunned tech stocks. NFT price cuts can discourage long-term customers.
Even so, there’s a major “if” here: Though shaky, the NFT market hasn’t vanished like, say, luna. NFTs aren’t fungible, therefore projects with well-executed artwork, a thriving online community, an interesting game, or an established fandom, like sports, can endure a wider shakeout. Since the outset, NFTs have been characterized by high volatility. Even that, though, is subject to change. Perhaps a reorganization will bring stability.