Billionaire Bill Gates is a notorious bitcoin skeptic who says he would bet against it if he could because he believes cryptocurrencies are worthless investments that people profit from by pawning their holdings off to a “greater fool” than themselves.
Bitcoin a ‘Greater Fool Theory’ Investment
“I would short it if there was an easy way to do it,” Gates told CNBC May 7 during a joint interview with his billionaire pals Warren Buffett and Charlie Munger. “As an asset class, you’re not producing anything, so you shouldn’t expect it to go up. It’s kind of a pure ‘greater fool theory’ type of investment.”
The three moguls convened over the weekend because they are members of the Berkshire Hathaway board of directors, which held its annual shareholder meeting on May 5. At the meeting, Berkshire CEO Buffett slammed bitcoin once again, this time calling it “rat poison squared,” as we reported.
Like other cryptocurrency bears, Bill Gates conceded that blockchain, the technology behind bitcoin, can be very useful but said virtual currencies are nothing more than crazy, speculative investments.
“Bitcoin and ICOs, I believe completely that [they’re some] of the crazier, speculative things [you could invest in],” he said.
Gates — whose net worth tops $91 billion thanks to the de facto monopoly Microsoft has enjoyed for decades — said someone once gave him bitcoin for his birthday, but he sold it.
Of course, if Gates really wanted to short bitcoin, he has a variety of options. Even if he doesn’t feel comfortable trading on a cryptocurrency exchange such as BitMEX, he could easily open a short position in bitcoin futures on CBOE, CME, or perhaps even Goldman Sachs‘ new bitcoin derivatives product.
That he doesn’t — even while protesting that he wishes he could — is telling.
Berkshire’s Bitcoin Bashing Barrage Continues
Berkshire Hathaway’s, Warren Buffett and Charlie Munger have been some of bitcoin’s fiercest critics. During the same interview, billionaire Charlie Munger — the vice chairman of Berkshire Hathaway — called bitcoin “worthless” and useless.
“Bitcoin is worthless, artificial gold,” Munger said. “That is not something I think the world needs. The fact that it’s clever computer science doesn’t mean it should be widely used, and that respectable people should encourage other people to speculate on it. Bitcoin reminds me of Oscar Wilde’s definition of fox hunting: ‘The pursuit of the uneatable by the unspeakable.’”
Munger, 94, has said bitcoin trading is akin to clueless people with dementia trading feces to keep up with everyone else. “[It’s] like somebody else is trading turds and you’re being left out,” he said.
Bill Gates’ skepticism toward crypto is no surprise given his cynical outlook on the entire market.
As we previously reported, Gates blames bitcoin for drug deaths, claiming cryptocurrencies are go-to vehicles for illegal drug sales and money-laundering.
“Right now cryptocurrencies are used for buying fentanyl and other drugs, so it is a rare technology that has caused deaths in a fairly direct way,” Gates said in March 2018. “I think the speculative wave around ICOs and crypto currencies is super-risky for those who go long.”
Tech’s New Guard Bullish on Cryptocurrency
Despite the bearishness of these “old guard” billionaire moguls, the new crop of tech billionaires has no doubt that bitcoin is the unstoppable wave of the future.
“I’m convinced 100 percent that crypto is the future,” Binance founder Changpeng Zhao told Bloomberg. “I just know it will happen.”
Similarly, the Winklevoss twins Tyler and Cameron (estimated net worth: $900 million to $1.1 billion) say bitcoin skeptics who flippantly dismiss crypto suffer from an epic “failure of imagination.”