Unless you’re the world’s richest person, you shouldn’t be buying bitcoin. That’s the message from Bill Gates – the third richest.
With a rally of more than 400% over the past year, bitcoin has become increasingly mainstream, and everybody including prominent investors and policy makers have been talking about it. Elon Musk’s Tesla recently invested US$1.5-billion in the cryptocurrency and said it would accept it for payments.
For Gates, it’s not something Main Street should buy into — plus it’s bad for the environment as mining the coins requires a lot of energy.
“Elon has tons of money and he’s very sophisticated, so I don’t worry that his bitcoin will sort of randomly go up or down,” Gates said in an interview with Bloomberg Television. “I do think people get bought into these manias who may not have as much money to spare. My general thought would be that if you have less money than Elon, you should probably watch out.”
Musk, who’s worth $189.6-billion as per the Bloomberg Billionaires Index, has been an avid supporter of bitcoin — so much so that he’s influenced the token’s price. It surged as much as 76% this month following Tesla’s investment, before tumbling 13% after he tweeted the prices of cryptocurrencies “do seem high”.
The debate over bitcoin isn’t new. Billionaire Warren Buffett deems cryptocurrencies have no value and don’t produce anything. Treasury secretary Janet Yellen, another long-time sceptic, said at a New York Times conference earlier this week that bitcoin is an “extremely inefficient way of conducting transactions”.
But with more and more companies starting to accept bitcoin — as PayPal, Visa and Mastercard recently have — the token has gained wider acceptance. As central banks including the Federal Reserve and European Central Bank are studying how to digitalise their own sovereign currencies, and firms such as Fidelity Investments launch funds letting investors add cryptocurrencies to their portfolios, the debate is here to stay. — Reported by Yoojung Lee, (c) 2021 Bloomberg LP