The dumbest theory in finance starts with an investor doing something stupid in the hope that later someone else will decide to do something even dumber.

The first buyer pays an inflated amount of money for an item, then puts it up for sale at an even more exorbitant price, trying to find someone “more stupid” to buy it for him.

Tulips can be the trade-off in this dangerous game. the first big financial bubble in world history In the first half of the 17th century – or, according to the last words of Bill Gates, bitcoins.

The founder of Microsoft, at a conference in Berkeley, California, said that the market for cryptocurrencies and NFTs (digital tokens) based on the big idiot theory “100%”.

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And according to this theory, it is possible for investors to make a profit by buying very expensive and then selling it to another investor.

This whole loop works without anyone considering what the real value of the asset is Experts say many investors probably fall into this trap unknowingly.

The price of gasoline can go up and down, but oil is always backed by its utility. It is useful for something.

Gates added that he prefers it. invest in companies that create real products.

And not on a service whose “anonymity is used for tax evasion,” in reference to the most famous cryptocurrency.

He said that people buy cryptocurrencies and NFTs regardless of their prices and are convinced that they can sell for more. “Someone is willing to pay more for it than I am”.

And he stated that he has never invested in the market.

Other investors and wealthy executives, including Warren Buffett or Jamie Dimon, have also expressed their skepticism about cryptocurrencies.

Buffett was once called bitcoin “rat poison square”.

Gates was also ironic about the value of NFTs or non-tradable tokens.

they are certificates ownership of virtual or physical assets often used in the art or digital music world. After becoming extremely popular last year, their demand seems to have stabilized recently.

“Obviously I’m expensivedigital images of monkeys will improve the world a lot. Unbelievable,” Gates said sarcastically on the forum.

The 66-year-old philanthropist and billionaire was talking about the Bored Ape Yacht Club’s digital art collection. image of a monkey with minor variations selling for thousands of dollars.

But now that the world economy is going through a bad time, investors prefer to invest their capital in less risky investments and avoid the most speculative bets such as cryptocurrencies or digital certificates, two markets that lack legal protection.

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In 2022, Bitcoin accumulation fell by over 50%, while ethereum lost 69% of its value.

Monkey NFT also lost more than half of its value.

All this shows that “stupidest” search chain stopped affects many other parts of the market.

Just this week, Celsius platform, one of the largest lenders in digital currencies and a key player in the decentralized financial world, decided to protect itself from “extreme market conditions”. Freezing accounts of 1.7 million users and to impose a kind of “corralito” on their customers.

Likewise, Binance, the world’s largest cryptocurrency exchange, had to “pause” bitcoin withdrawals for several hours. Another major platform, Coinbase Global, announced that it will lay off almost a fifth of its employees..