In finance, the most stupid theory is started by an investor doing something stupid in the hope that later someone else will decide to do something even stupider.
The first buyer pays an inordinate amount of money for a commodity, and then offers it for sale at a more exorbitant price, trying to find a “dumbest” person to buy it for.
In this dangerous game, what is exchanged may be tulips – as in The first big financial bubble in world history In the first half of the 17th century – or according to the last data of Bill Gates, bitcoins.
The founder of Microsoft stated at a conference in Berkeley, California, that the cryptocurrency market and NFT (digital tokens) “100%” is based on the great idiot theory.
According to this theory, investors can make a profit by buying expensive and then selling it to another investor.
This entire course works Without anyone stopping to think about the true value of the asset Experts say many investors fall into this trap, perhaps without even knowing it.
The price of gasoline can rise, but oil is always supported by its usefulness. It is useful for something.
Gates added that he prefers Invest in companies that make real products.
He said he’s not in a service that uses “anonymity to evade taxes,” referring to the most popular cryptocurrency.
He said that people bought cryptocurrency and NFT regardless of its price and were convinced that they could sell at a higher cost because they “Someone is willing to pay more for it than me”.
He stated that he had never invested in this market.
Other investors and wealthy executives, including Warren Buffett or Jamie Dimon, have expressed skepticism about cryptocurrencies.
Buffett once called Bitcoin “rat poison box”.
Gates was also cynical about the value of non-fungible tokens.
They are testimonials Ownership of virtual or physical assets Often used in the world of digital art or music. Having become so popular last year, it seems that the demand has stabilized recently.
“It’s obviously expensiveDigital pictures of monkeys will improve the world a lot. It’s unbelievable,” Gates said sarcastically at the forum.
The 66-year-old philanthropist and billionaire was referring to the Bored Ape Yacht Club digital art collection, a limited collection of 10,000 unique pieces of A picture of a monkey with slight differences has been sold for thousands of dollars.
But now that the global economy is going through a bad period, investors are preferring to put their capital into less risky investments and flee more speculative bets like cryptocurrencies or digital certificates, two markets that have no legal protection.
Bitcoin accumulates more than 50% in 2022, while Ethereum has lost 69% of its value.
Monkey NFT also lost more than half of its value.
All of this suggests that The search string for “dumber” has stopped. Affect many other parts of the market.
Just this week, Celsius, one of the largest cryptocurrency lenders and a major player in the world of decentralized finance, decided to protect itself from “extreme market conditions.” Freezing accounts of 1.7 million users and impose a kind of “corralito” on their clients.
Along the same lines, Binance, the world’s largest cryptocurrency exchange, had to “pause” bitcoin withdrawals for a few hours while Coinbase Global, another major platform, has announced that it will lay off nearly a fifth of its employees..