Microsoft co-founder Bill Gates boldly admitted that he would bet against bitcoin if he possibly could.
“As an asset class, youâ€™re not producing anything and so you shouldnâ€™t expect it to go up. Itâ€™s kind of a pure ‘greater fool theoryâ€™ type of investment,” Gates was quoted as saying on CNBCâ€™s “Squawk Box.”
“I agree I would short it if there was an easy way to do it,” he added.
The price of one bitcoin momentarily rose $2,000 last year to almost $20,000 in the middle of December. Since then, the cryptocurrency has lost more than half its value and was exchanging near $9,400 on Tuesday. Roughly $9.8 billion has been raised through sales of new coins, or ICOs, since 2016, according to financial research firm Autonomous Next.
“Bitcoin and ICOs, I believe completely [theyâ€™re some] of the crazier, speculative things,” Gates remarked. He added someone once offered him some bitcoin for his birthday, but he sold it a few years later.
Like many detractors of the cryptocurrency price hike, Gates did acknowledge that the underlying blockchain technology had immense potential.
Blockchain takes away the need for a third-party intermediary, such as a bank, by generating a safe, permanent record of a transaction between two parties. Bitcoin is the first application of blockchain technology, and companies are looking at different ways to implement blockchain to supply chain management, trading and other areas.
Gates is on the board of Warren Buffettâ€™s Berkshire Hathaway and was talking from Omaha, Nebraska, where the conglomerate had its annual shareholders meeting over the weekend. Billionaire investor Buffett and his longtime investing partner and vice chairman, Charlie Munger, spoke to the tens of thousands attendees on different subject matters, but none more explosive than bitcoin which was called “rat poisonâ€ť by Warren Buffet.
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