The billionaire philanthropist: Bill Gates – co founder of Microsoft, on CNBC’s Squawk Box added some strong words against bitcoin and any crypto-investment-related activity.
“As an asset class, you’re not producing anything and so you shouldn’t expect it to go up. It’s kind of a pure ‘greater fool theory’ type of investment,” Gates
This is an economic theory which explains that the price [in this case of cryptocurrencies] is not as a result of its actual value but the summed up beliefs or even expectations taking part in that market. For example: oil has tangible benefits that can easily be demonstrated—run cars, and generate heat in the winter. Cryptocurrencies, or bitcoin, specifically, is merely digital code—which concludes with being 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.”
Despite standing very bearish against cryptos or bitcoin, he continued that the technology behind the coins – blockchain does bring up some value. Blockchain eliminates the need for a third-party intermediary, such as a bank, by quickly creating a secure, permanent record of a transaction between two parties. Various companies and financial institutions are studying blockchain tech and looking at ways to implement it to trading, supply chain management and other areas.