We would all think Bill Gates, the founder of the most popular operating system in the world Microsoft Windows would be up to date with technology. However, he proved otherwise, by stating to CNBC that he would short Bitcoin if he could.
Bill Gates is an American business magnate, investor, author and humanitarian well known for founding Microsoft. When speaking to CNBC yesterday, he clearly stated that Bitcoin was a ‘greater fool’ investment.
“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 specifically said about Bitcoin.
The greater fool theory is that some assets are perpetuated by reselling the asset to a ‘greater fool’ who accepts the asset at a higher price than what the previous investor bought it. It is a theory which suggests the cycle will keep continuing with hopes of a higher buy price.
In addition to this, he mentioned that he ‘would short it if he could.’ What seems very funny is that Bitcoin can be shorted using futures contracts on one of the world’s leading derivatives marketplace CME. Even Goldman Sachs has plans to enter into the Bitcoin future contracts field.
Shorting is defined as a method of trading to make a profit from the declining value of an asset.
With Goldman Sachs finally approving cryptocurrencies as something that makes sense, Bill Gates, the Microsoft mogul thinks otherwise. He fears that it is too risky for long-term commitments either as a client or institution.
“Bitcoin and ICOs, I believe completely they’re some of the crazier, speculative things,” Gates said.
It has been noticed that the aged and very experienced like Warren Buffet and Charlie Munger too are not very big fans of Bitcoin. Whether it is too confusing or does not make sense to traditional businesspeople and investors is something that is proving to be right.
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