Are NFTs ‘shams’ and people who invest in it ‘fools’?

Lavina Daryanani
Source: Moneycontrol

The state of the crypto market has, evidently, been withering. Alongside, the NFT market has also been in a fix. The sales of most top collections, including that of the Bored Ape Yacht Club, Mutant Ape Yacht Club, CryptoPunks, Otherdeed, and MoonBirds have fallen by 60% to 90% respectively over the past 30 days.

Well, the winter phases of all markets usually coincide with each other and this tradition has only become concrete over time. However, stalwarts’ extreme opinions and their biases usually tend to get even more concrete when the broader trend swings in their favor. At such times, they seldom shy away from overtly commenting about the same.

Gates equates NFTs to shams

Quite recently at a climate conference, Bill Gates disregarded digital assets including cryptos and NFTs. He ended up equating them to shams “based on the greater fool theory” He justified his stance by emphasizing on the criticisms associated with digital assets.

The Greater Fool Theory, as such, suggests that there will always be a “greater fool” in the market who would be ready to pay a price based on a higher valuation for an already overvalued security. They end up doing so in anticipation of making profits by re-selling them at a much higher rate.

Per the theory, at the end of the day, someone would be left stuck with the asset when the speculative bubble ends up bursting and the masses begin realizing that the underlying prices of investments are way too high.

Per a recent BNN Bloomberg report, the billionaire ended up mocking NFTs while speaking at TechCrunch’s event in Berkeley on Tuesday. Using a sarcastic tone, he said,

“Obviously, expensive digital images of monkeys are going to improve the world immensely.”

He quickly shifted to a more unbiased tone and said that he’s neither long nor short on the asset class. Well, this isn’t the first time that Gates has criticized the digital asset class. He has commented several times before about the inherent risks and the environmental harm of cryptos like Bitcoin.

Elaborating on similar lines in the said event, BN Bloomberg brought to light,

Gates also defended the digital banking efforts he has supported through his philanthropic foundations, which he described as “hundreds of times more efficient” than cryptocurrencies.

Gate ain’t alone, he has company

Gates is not the only one who’s on the anti-page of the crypto, blockchain, and NFT book. Hathaway CEO Warren Buffett and Vice Chairman Charlie Munger share congruent opinions. Notably, they had criticized Bitcoin last month by labeling the asset to be ‘evil’ and ‘stupid.’