The world’s richest man Bill Gates stopped by CNBC’s Squawk Box Monday with some strong words for bitcoin and those who believe it to be the second coming.
According to CNBC, Bill Gates is skeptical or has a strong dislike to bitcoin and other cryptocurrencies that his only involvement with it resulted from a birthday present—which he sold a few years later.
The Microsoft co-founder and billionaire philanthropist explained that his rejection of these new cryptocurrencies is rooted in the lack of tangible worth. “As an asset class, you’re not producing anything and so you shouldn’t expect it to go up,” he said.
“It’s kind of a pure ‘greater fool theory’ type of investment.”
Gates is referring to an economic theory that the price of an item isn’t based on its actual value, but instead, by the collective beliefs and expectations of those participating in the stock market. In other words, oil has tangible benefits that can easily be demonstrated—you can power a city, run cars, and generate heat in the winter. Cryptocurrencies, or bitcoin, specifically, is merely digital code—and thereby vulnerable to fluctuation based on the unreliable opinions of everyone trading stock.
“I agree I would short it if there was an easy way to do it,” said Gates. “Bitcoin and ICOs, I believe completely [they’re some] of the crazier, speculative things,” the businessman added.
Blockchain, of course, is tech that provides a secure two-way connection allowing for transactions to be completed without the need of a bank.
Naturally, this kind of digital evolution can be pretty scary to the system set in place, but Gates seems apprehensive for more rational, economy-based reasons here.