Bill Gates has recently come under fire for calling crypto and NFTs a “stupid” investment. At the TechCrunch Sessions: Climate 2022 conference, he said that blue-chip NFT projects like Bored Ape Yacht Club NFTs “are not going to improve the world immensely.”

Why is Bill Gates denouncing crypto and NFTs?

According to Bill Gates, non-fungible tokens and crypto are based on the greater fool theory. In finance, the bigger fool theory is based on the premise that someone can make money by buying overvalued assets and then selling them to an even “bigger fool” for a profit. The billionaire cemented his sentiment by saying that the rapid and volatile rise and fall of these assets depends on one investor being willing to pay more than the other.

In a Reddit Q&A session, Bill Gates commented, “The value of crypto is what another person decides someone else will pay for it, so it doesn’t contribute to society like other investments.” Bill Gates endorsed continued the digital banking effort to which he had donated. In fact, he claimed that they are “a hundred times more efficient” than crypto and NFTS.

Debunking the Greater Fool Theory

The Greater Fool theory is based on the assumption that the selling price of items is greater than their intrinsic value. We can compare crypto and NFTs to crude oil in the US. Before the 1850s, crude oil was considered a nuisance. Things changed drastically when George Bissell realized that crude oil could be processed and used as a machine lubricant. Very few recognized the potential early on. However, those that did made big bucks as demand skyrocketed.

Crypto and NFTs are the crude oil of the 21st century. For now, their real-world use cases are limited. However, as the world becomes increasingly digitized, digital assets such as crypto and NFTs will become commonplace. Consequently, buying crypto and NFTs today is similar to buying crude oil before the 1850s; You can invest and store these digital assets wisely and bid your time until demand increases.