Bill Gates Says He Still Won't Invest in Crypto, Calls It a "Pure Mania-Driven Asset." Here's Why He's Right.
Bill Gates Says He Still Won't Invest in Crypto, Calls It a "Pure Mania-Driven Asset." Here's Why He's Right.
Jeff Siegel, The Motley FoolSat, September 5, 2026 at 11:50 PM UTC
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Image source: Getty Images.Key Points -
Bitcoin’s massive gains don’t eliminate its fundamental investment risks.
The cryptocurrency's value still depends heavily on future investor demand.
Productive businesses offer a stronger foundation for long-term wealth.
10 stocks we like better than Bitcoin ›
Microsoft co-founder Bill Gates was recently asked where he would put money if he wanted to diversify away from the U.S. dollar. His choices included gold, the euro, Chinese yuan, and cryptocurrency. Gates said he still wouldn't choose crypto as an investment, calling it a "pure mania-driven asset." If he wanted to diversify away from the U.S. dollar, he'd rather own a globally diversified basket of stocks. He makes sense.
It's not because Bitcoin(CRYPTO: BTC) is worthless. Bitcoin has clearly proven that people are willing to assign enormous value to a decentralized digital asset. And anyone who listened to Gates' warnings years ago and avoided Bitcoin missed some spectacular gains. But price appreciation doesn't necessarily make something a great long-term investment.
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Stocks actually produce something
When you buy shares of a company, you're buying a piece of a business that can generate revenue, earnings, and cash flow. Apple sells iPhones. ExxonMobil produces oil. Caterpillar sells heavy equipment.
Bitcoin doesn't produce anything. There's no revenue, earnings, or cash flow. Your return depends solely on somebody eventually paying you more for it than you paid.
Gates has been making this argument for years. Back in 2018, he described Bitcoin as a "greater fool theory" investment. In 2022, he said he preferred investments with "valuable output," arguing that companies create products while crypto's value ultimately depends on what someone else is willing to pay. If you're in it for the long haul, this is not something you want to ignore.
Bitcoin can still go much higher
None of this means Bitcoin will collapse. There are legitimate arguments for owning it. Bitcoin has a fixed maximum supply of 21 million coins, can be transferred globally without a traditional financial intermediary, and has gained acceptance among institutional investors.
It could reach $100,000. It could reach $200,000. But determining what Bitcoin should be worth is extremely difficult because there are no traditional fundamentals underneath it. You can't calculate a price-to-earnings ratio, estimate future dividends, or project free cash flow and discount it back to today's value. You're largely betting on future demand. And that's precisely Gates' point.
I'd take Gates' advice
Years ago, Gates made a huge mistake shorting Tesla. It was a rookie move by a guy who clearly knows how to make a lot of money but also, sometimes, lacks the creativity and foresight to see beyond the confines of mediocrity.
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That said, if I had to choose between investing $10,000 in Bitcoin and investing $10,000 in a diversified portfolio of profitable companies for the next 20 years, I'd take the stocks. Not because Bitcoin can't outperform them. It certainly could. But businesses create products, generate profits, reinvest capital, and compound earnings. Over long periods, that gives you something tangible supporting your returns.
Bitcoin gives you scarcity, network effects, and the expectation that future buyers will value those things even more. That's been an incredibly profitable bet so far. But Gates is right that it's still a bet driven largely by what someone else will eventually pay. And that's not an ideal way to build long-term wealth.
Should you buy stock in Bitcoin right now?
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Jeff Siegel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Bitcoin, Caterpillar, Microsoft, and Tesla. The Motley Fool has a disclosure policy.
Source: “AOL Money”
