Bill Gates has never been a fan of cryptocurrencies or NFTs, and those feelings were again on full display. This time, at a climate conference hosted by TechCrunch on Tuesday.
Gates slammed the crypto and NFT sector as being “based on the greater-fool theory.” This theory is the idea that investors can sometimes make money buying overvalued assets if those assets can be sold to someone else at a higher price.
That theory worked well for investors and traders of cryptocurrencies and NFTs, until it didn’t. This can be pinpointed to around November when bitcoin tapped-out at about $69,000. Since then, the cryptocurrency market has erased $2 trillion in market value and bitcoin has dropped 70% to $21,000.
Bill Highlights The Weaknesses Of Cryptocurrencies And NFTs
The weakness in cryptocurrencies comes amid an implosion of various stablecoin and staking projects, including Luna, TerraUSD. The most recent weakness being Celsius Network, which halted withdrawals on its network and erased billions of dollars in market value.
“Obviously, expensive digital images of monkeys are going to improve the world immensely, and that’s so incredible.” …Gates said with sarcasm.
“I’m used to asset classes like a farm where they have output or a company where they make products. To have an asset class that is 100% based on a sort of greater-fool theory that somebody is going to pay for it more than I do. And where it has at its heart this anonymity that you avoid taxation or any sort of government rules.” Gates said.
Meanwhile, the Bored Ape Yacht Club has been a key symbol of rising valuations in the NFT market. Interestingly, celebrities are snapping up disinterested ape illustrations alongside seven-figure sales. But now, the Ethereum profile picture collection shows how much NFT demand has fallen amid a wider crypto market crash.
Bored Ape NFT Slumps
The floor price for a Bored Ape Yacht Club NFT – the cheapest available item listed on a secondary marketplace – currently sits at $96,469, or 80 ETH, according to NFT Price Floor. Overnight, the price fell as low as $91,741, per decrypt.co report.
Currently, the cost of an entry level Bored Ape NFT has dropped by about 78% in 2 months in dollars. However, the floor price sat at $429,000 on the day just before the Bored Ape NFT game – Otherside – was launched.
In terms of ETH, the collection has dropped by a severe 47% since then. Although the price is decent, this statistic only reflects the fallen price of ethereum and how it affects NFT collections.
Every significant NFT collection has lost a huge amount of value over the past month. When measured in USD, Bored Apes are down 54% in the last 30 days. Surprisingly, CryptoPunks are also down 48% in that span and the newer Moonbirds have shed 62% of their value.
How Fall Of Cryptocurrency Has Affected NFTs
The NFT market saw skyrocketing demand in 2021, generating $25 billion worth of trading volume. The demand persisted in 2022, with nearly $16 billion worth of organic trading in the first four months this year. On May 1, leading NFT marketplace OpenSea marked its best single day of trading at $476 million.
The fading crypto-market have impacted the NFT space significantly, with daily trading volume falling off instantly with the market’s crash. However, with leading coins like Bitcoin and Ethereum reaching lows not seen since 2020, NFT trading actually climbed as buyers sought “bargains” amid depressed prices.