Published: February 23rd, 2021
Bitcoin has surged significantly in the past few weeks. However, it seems the gains are not enough to convince everyone to embrace virtual currencies. The latest rebuke comes from Bill Gates, the Microsoft co-founder, and philanthropist. It is now emerging that the Microsoft co-founder turned philanthropist is still not a fan of cryptocurrencies after all. In an interview published in the Wall Street Journal on Thursday, February 18, the tech magnate said the world is better off without virtual currencies.
Asked what technological invention the world could do without, Gates said, the way cryptocurrency works now allows criminal elements to perpetuate their agenda and carry out unlawful activities.
Gates, who is the third-richest person on earth, added that it would be good to rid the world of cryptocurrencies. The tech whiz joked that picking crypto over bioweapons as the innovation the world is better off without shows how lowly he takes virtual currencies. He added that Bitcoin and altcoins topping his list mean they are not such a great idea!
According to Mark DeCambre, a columnist with MarketWatch, Mr. Gates’s comments might mean he is not a Bitcoin enthusiast. The journalist added that Mr. Gates is only expressing an opinion shared by many others. He feels that virtual currencies are prone to abuse in money laundering schemes and swindling operations.
DeCambre added that Gates’s comments are common among many people who offer criticism against virtual currencies since their creation in 2009.
However, the Billionaire seems to have changed his mind. In a CNBC interview aired the same day the Wall Street Journal article appeared, he seemed to have adopted a more moderate stance, saying he is Bitcoin neutral.
Gates said he does not own Bitcoin or short the cryptocurrency, so he takes a neutral view of the virtual currency. In the interview that aired on the Squawk Box show on CNBC, Gates said he does not think transferring money into a digital interface and reducing transaction costs is something that his foundation does in developing countries.
He added that Bitcoin could sway vigorously depending on mania or whatever opinion the markets hold, and he does not have a way of predicting the trends.
The world’s first virtual currency has experienced parabolic moves lately. The moves came even after critics slammed the technology behind the virtual coins saying that the blockchain technology seeks to solve a nonexistent problem and uses excessive amounts of energy to mine a single Bitcoin.
This latest episode of the Squawk Box is not the first time Mr. Gates has disparaged cryptocurrencies. He has discussed Bitcoin and altcoins in various forums since the discussion on virtual currencies began in earnest, and his opinion has wavered over the years.
In 2018, he appeared in the same show where he said he would bet against Bitcoin if he had the opportunity. Gates said in the interview that as an asset class, Bitcoin does not produce anything. It is therefore foolhardy to expect it to rise.
The entrepreneur compared the virtual currency to some greater fool theory kind of investment.
Mr. Gates’s comments come at a time when the cryptocurrency is shattering all records. On Sunday, February 21, the coin went past $58,250, setting a new all-time record in the process. At the same time, its market capitalization has gone past $1 trillion for the first time.
The virtual currency has gained more than 80% since 2021 began. Bitcoin figures far outstrip any conventional investment. By comparison, the S&P 500 index has managed a modest 4% year-to-date improvement, while the Dow Jones Industrial Average has climbed by only 2.7% since the year began.
Bitcoin is also more profitable than the Nasdaq Composite, which has managed an impressive 8% year-to-date. Even Gold, which most market analysts often pit against Bitcoin, has not managed to climb and has instead dropped some 6.5% since the year began.
Mr. Gates joins Warren Buffet, the CEO of Berkshire Hathaway, who has publicly disapproved of cryptocurrency in the past.
However, Mr. Gates is in awe of one of Bitcoin’s most prominent proponents. While speaking on CNBC, Mr. Gates praised Tesla CEO Elon Musk. He said what Musk has done to inspire the world is phenomenal. He added that it is the single-biggest contribution by an individual showing that electric cars can tame the tide of climate change.
Meanwhile, Musk and Tesla lead the entities that have brought big money into crypto.
In the latest filing, the company revealed that it had sunk $1.5 billion in Bitcoin. Besides, Tesla is contemplating accepting cryptocurrency as a payment method for its products. The company, which is now part of the S&P 500 index, purchased the crypto in January.
Tesla’s acquisition means that investors holding its shares or S&P 500 funds now have a stake in the crypto market indirectly. Meanwhile, the company’s earnings from Bitcoin have far outstripped returns from its core business – selling electric cars.
Data from Bitcoin Treasuries indicate that the electric carmaker’s paper profits from Bitcoin stand at $1.08 billion, almost 30% more than the $721 million revenue it got from electric vehicle sales in 2020.
The news of Tesla’s investment in Bitcoin and the subsequent gains keep sending the price of the crypto higher. Meanwhile, Tesla’s shareholders are happy, but they are fidgety as well. Baillie Gifford, one of the company’s significant shareholders, has called for a meeting on crypto investment.
James Anderson, a senior partner at Baillie Gifford, said his company his content with the $1.5 billion investment. However, he said he foresees investors putting limits on such bets.
Former Microsoft CEO turned philanthropist Bill Gates has slammed Bitcoin. The Billionaire said the cryptocurrency’s mysterious nature makes it a leading candidate for money-laundering and swindling schemes. Speaking to CNBC, Mr. Gates said the world is better off without the technology supporting virtual currencies.