Speaking at a TechCrunch talk on climate change on Tuesday, the billionaire Microsoft co-founder described the phenomenon as “100% based on greater fool theory,” referring to the idea that overvalued assets will rise in value when enough investors are willing to pay more for them.
Gates joked that “expensive digital images of monkeys” would “immeasurably improve the world,” referring to the much-touted Bored Ape Yacht Club NFT collection.
NFTs are tokens that cannot be exchanged for other tokens. They’re frequently promoted as a means of proving ownership of digital assets such as art or sports collectibles. However, given the energy-intensive nature of cryptocurrencies, critics see them as overhyped and potentially harmful to the environment. Many NFTs are built on the Ethereum network, which is the second-largest token.
“I’m used to asset classes… like a farm with output or a company with products,” Gates explained.
“I’m not involved in that,” Gates said of cryptocurrency. “I’m neither long nor short in any of those dimensions.”
This week, cryptocurrency prices plummeted after Celsius, a crypto lending firm, halted all account withdrawals. The saga has fueled fears of a looming insolvency event for Celsius, as well as potential spillover effects for other parts of the crypto market. Celsius, for its part, claims to be “working around the clock for our community.”
Following the collapse of UST — a so-called stablecoin that was supposed to be worth $1 — and luna, its sister token, the crypto world was already licking its wounds. Both cryptocurrencies were worth a total of $60 billion at their peak.
Bitcoin was last traded at $21,107 on Wednesday, down 7% in the previous 24 hours. Since the beginning of 2022, the world’s largest cryptocurrency has lost more than half of its value.
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