This morning, on an interview on CNBC’s program “Squawk Box”, Microsoft’s founder and biggest shareholder, Bill Gates gave bitcoin a bashing by saying that bitcoin and Initial Coin Offerings were some of the “crazier and speculative things” that he had seen. In the program, he was accompanied by none other than the legendary investor Warren Buffett, who has also a negative opinion about bitcoin and has been very vocal about it lately.
Bill Gates also said that the technology behind the cryptocurrency is indeed beneficial and has many applications to resolve problems with remittances and transactions without a third party needed to certify those. Bill agrees with Buffett that investing in bitcoin is a kind of gambling and that it should not have any intrinsic value. He stated:
“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”
By greater fool, he refers to that the value of bitcoin is determined only by the demand of a third party who thinks that there will be another investor that will buy to sell the crypto asset by a greater margin after a period of time. He concluded by saying that he would bet against bitcoin in the market if there was an easy way to do it.
Bill fills the ranks of some traditional investors that are skeptical in the concept of cryptocurrencies and bitcoin alike, maybe because they are not familiarized with the technology and how it works, or maybe because they feel threatened by a different business model.
The greatest mistake he commits is putting bitcoin and ICOs in the same bag. The fact is that there are investors that have built small fortunes putting money on bitcoin, and many enterprises have also made record profits by offering services that center around bitcoin its main concern like exchanges, payment processors and even retail shops.