(Kitco News) As crypto investors watched their market dramatically crash this week, Microsoft co-founder Bill Gates compared NFTs (non-fungible tokens) to "greater fool theory." Here's what he meant.
Digital assets like NFTs are "100% based on the sort of greater fool theory that someone is going to pay more for it than I do," Gates said during a TechCrunch conference this week.
The Microsoft co-founder was replying to the question on cryptos when he made fun of the Bored Ape Yacht Club - a collection of non-fungible tokens built on the Ethereum blockchain. The collection consists of profile pictures of cartoon apes generated by an algorithm, which have been known to sell for a very hefty price tag.
However, following the crypto crash, the lowest price for a Bored Ape Yacht Club NFT has fallen to below $100,000 — the first time since August 2021, according to NFT Price Floor.
Gates sarcastically quipped: "Expensive digital images of monkeys are going to improve the world immensely."
He also added that he prefers more traditional types of investments, including farmland or equities. "I'm used to asset classes, like a farm where they have output, or like a company where they make products," Gates noted.
But Gates is neither short nor long crypto, adding that he is "not involved in that."
"At its heart, this anonymity that you avoid taxation or any sort of government rules about kidnapping fees. I am not involved in that. I am not long or short any of those things," he added.
The Bored apes are buckling now https://t.co/Z8WiG5Orh7
— Izabella Kaminska (@izakaminska) June 14, 2022
Following the crypto crash this week, Bitcoin is down nearly 70% from its November all-time high of $69,000. The world's largest cryptocurrency was last trading at $21,011.
Meanwhile, Ethereum is down 77% from its November all-time high of $4,878. The world's second-largest cryptocurrency was last at $1,112.
Crypto's overall market cap dropped to $942 billion after rising above $3 trillion in November.
