According to Bill Gates, NFTs are based on the “bigger chump theory”

NFTs are currently a controversial topic: some see endless possibilities in them, others condemn them as a scam. Publishers like Ubisoft want to implement them in games, indie developers are rather skeptical and also warn of possible consequences for climate protection. Microsoft founder and billionaire Bill Gates has now commented on the subject. According to Gates, NFTs are 100% based on the “Greater Fool Theory.”

If that theory doesn’t tell you anything: That theory assumes that the price of a financial product, e.g. B. a share, is determined solely by whether it can be sold at a later date at a higher price. The rest is unimportant. So you don’t ascribe any intrinsic / neutral value to the financial products. The person who pays you the higher price is then just the “bigger sucker” than you.

Therefore, according to the Greater Fool Theory, it can also make sense to buy speculative properties at very high values. There just has to be a market or buyer who will go one better. The “fear of missing out” (FOMO) also plays a role here. Bill Gates now believes that the NFT market is 100% based on the Greater Fool Theory. That’s why he personally has no interest in investing in NFTs or cryptocurrencies, which are also usually associated with that theory.

The billionaire says he prefers to invest in assets that actually produce something real – e.g. B. Factories, farms or even companies that manufacture products. Gates also couldn’t help but taunt what is probably the most well-known NFT project, the Bored Ape Yacht Club: “Obviously, expensive, digital images of apes will improve the world immensely,” he joked. Strictly speaking, however, the NFTs are not even to be equated with images themselves, but rather their linking in the blockchain.

Incidentally, Gates warned of the volatility of cryptocurrencies as early as 2021, when the boom had just peaked. As we now know, he was right about that.

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