Bill Gates, the billionaire Microsoft co-founder, is not a fan of cryptocurrencies or non-fungible tokens (NFTs).
Speaking on Tuesday 14 at a TechCrunch talk on climate change, Bill Gates described cryptocurrency as something that’s 100% based on greater fool theory,” referring to the idea that the prices of overvalued assets such as cryptocurrency will go high when there are enough investors ready to pay more for them.
The billionaire joked that “expensive digital images of monkeys” would “improve the world immensely,” while referring to the Bored Ape Yacht Club NFT collection.
NFTs are a type of tokens that cannot be exchanged for one another. They are normally touted as a way of proving ownership of digital assets such as art or sports collectibles.
However, critics see NFTs as being over-hyped and harmful to the environment because of the high amount of energy needed for cryptocurrency mining. Most NFTs are based on the Ethereum blockchain network, the second-largest cryptocurrency by market cap.
“I’m used to asset classes … like a farm where they have output, or like a company where they make products,” said Gates.
As for cryptocurrency, “I’m not involved in that,” he added. “I’m not long or short any of those things.”
The cryptocurrency market experienced a sharp fall this week after Celsius, one of the top cryptocurrency lenders, paused all withdrawals. This has led to fears of an imminent insolvency event for Celsius. There are also fears that this event could have a ripple effect in other parts of the cryptocurrency industry. On its part, Celsius has said that it is “working around the clock for our community.”
Bitcoin however bounced 8% on Wednesday 15 after the Federal Reserve announced an increase in the benchmark interest rate by 0.75%. This is the biggest interest hike in 28 years, and the central bank is seeking to counter the inflation rates for more than four decades. Following the Fed’s announcement, the Bitcoin price rose to $22,500 and then pulled back to $21,500. This is according to data obtained from Coinbase, CoinMarketCap, and Binance.
On Thursday 16, the BTC price spent the better part of the day above the $21,000 mark, crossing this line downwards on a few occasions. The following BTC to USD chart shows the changes in Bitcoin value in the last 24 hours.
The altcoin cryptocurrency market also received a brief surge in prices as the expectations of a possible 100 basis point hike failed to materialize and the market received largely what is expected from the Federal Open Market Committee (FOMC) meeting on June 15.
The cryptocurrency industry was already licking the wounds of the collapsed Terra stablecoin and its sister token Luna after it de-pegged from the US dollar. The stablecoin was meant to maintain a value of $1, but it dropped in early May.
TRX stablecoin, USDD, also triggered fears in the cryptocurrency industry after showing distress signs. USDD’s price dropped to $0.97 on Monday after the outflow of funds from liquidity contracts.
In other crypto news, Ethereum also managed to rise above the $1,200 mark on Thursday 16 but has dropped to an Ethereum price of about $1,107 on Coinbase, Binance, and CoinMarketCap.