Bill Gates Warns Against Bitcoin 'Mania': 'Watch Out'

With Bitcoin’s volatility in full display this week, Bill Gates is warning would-be buyers with less money than Elon Musk to think carefully about their cryptocurrency investments before putting more money into it.

When asked for his take on Tesla’s decision to buy $1.5 billion worth of Bitcoin and Musk’s support for the cryptocurrency, Gates said his fellow billionaire has a lot of money and that he’s free to do what he wants to do with it. But he is more concerned about the other Bitcoin investors without millions to spare.

“Elon has tons of money and he’s very sophisticated so I don’t worry that his Bitcoin would sort of randomly go up or down,” he told Bloomberg. “I do think people who get bought into this manias may not have as much money to spare.”

With that, Gates reconfirmed some of his previous statements, including that he’s not bullish on Bitcoin. “My general thought would be: if you have less money than Elon, you should probably watch out,” he said.

When asked to expand on why he’s not bullish on the dominant cryptocurrency, Gates cited the tremendous energy needed to produce Bitcoin and its affinity to anonymous transactions. The Microsoft founder said there are things they invest in society that produce output.

“Bitcoin happens to use a lot of energy. It happens to promote anonymous transactions. They’re not reversible transactions,” he remarked, adding that the Gates Foundation is doing a lot in the field of digital currency.

“But those are things where you can see who’s making the transaction,” he explained.

Gates said he believes digital money is a good thing. “Our foundation is very proud that in the pandemic, a lot of the countries we funded to do this were able to get money out to their citizens very efficiently,” he remarked, noting that while such projects do not have the visibility of Bitcoin, the move toward digital money is a positive thing.

Bitcoin’s price made a steep correction, dropping from closing at $57,489 on Sunday to trading at $47,982 at the time this article is written.