Bitcoin Has a New Nemesis in Bill Gates

May 9, 2018         By: Steven Anderson

Right now, bitcoin—and by extension cryptocurrency—is starting to look like a contrarian investor’s paradise. With Jamie Dimon on record for months calling bitcoin a fraud (though he regretted it as recently as January 2018), and Warren Buffett calling it “rat poison squared” as recently as Monday. Now, there’s one more high-profile figure bemoaning bitcoin, and that’s none other than Bill Gates of Microsoft fame, who considers cryptocurrency little more than a “greater fool theory” investment.

Gates leveled his scathing criticisms against bitcoin on CNBC’s “Squawk Box,” noting that it was an asset class that wasn’t producing anything, and noted that he would “…short it if there was an easy way to do it.” It’s worth noting that Gates was a bitcoin owner for a while; someone once gave him some for his birthday, he noted, but he sold it a few years later.

Interestingly, Gates seems to just have a problem with cryptocurrency. The blockchain system upon which much of it is built, meanwhile, has plenty of value as far as Gates is concerned. That’s a point commonly shared by many critics of cryptocurrency.

Given that Gates is on the board of Berkshire Hathaway, Warren Buffett’s own company, some here might suggest that Gates is toeing the company line. There’s nothing to confirm that’s the case, but when Buffett comes out against it with both barrels, it would be easy enough to say that the board probably isn’t going to say “Shut up, you fossil; cryptocurrency is the future.”

Still though, with all the major names arrayed against cryptocurrency—why are they suddenly so concerned about the average joe’s financial well-being—it would be easy to think that cryptocurrency is either a giant scam with no future or the contrarian’s dream come true. With the sheer amount of regulatory firepower being brought to bear on cryptocurrency, though, considering it just a “greater fool” investment seems short-sighted. We’re already seeing cryptocurrency used in a variety of places, from the fully legal like Overstock.com to the largely illegal like Silk Road. With investment firms getting involved, legitimacy doesn’t seem far behind.

Only time will tell in the end just who ends up on the right side of history, and who becomes the next target of industry derision.