Dogecoin co-founder Billy Markus said that most people who buy cryptocurrencies are fools.
From my viewpoint it’s about 99.99% greater fool theory
— Shibetoshi Nakamoto (@BillyM2k) May 31, 2021
On his Twitter profile “Shibetoshi Nakamoto”, he posted a humorous tweet in which he questioned why the price of bitcoin in recent days was falling, despite Bitcoin having a cap on the number of BTC that will ever be issued.
In other words, he questioned whether the deflationary nature would give bitcoin value. On the other hand, Dogecoin, for example, is not deflationary in nature, and does not have a cap on the tokens that can be created.
Markus then extended the argument to all cryptocurrencies, and among all the responses received was one from Ben Royce, who suggested that behind the growth in the value of cryptocurrencies is the so-called “Greater Fool Theory”, i.e. that prices rise because there are other fools willing to pay more and more.
At this point, wondering how much of the value of cryptocurrencies is based on this theory, and how much is based on technical or technological reasons, Markus said that he believes 99.99% of cryptocurrency purchases are made according to the “Greater Fool Theory” dynamic, which is basically just hoping that they will increase in value.
The co-founder of Dogecoin and the Greater Fool Theory
In fact, according to this theory, it is possible to profit even from buying overvalued assets if you can find an even more foolish buyer willing to pay a higher price. The cycle continues until there are no bigger fools left to sell to.
In addition, Markus, who has not had an active role in the development of Dogecoin for some time, said a few months ago that Dogecoin “was indeed created for sillies” in just 3 hours.
“The first few weeks after Dogecoin was released was incredibly fast moving, and I think I would succinctly describe it as “complete utter insanity.” It went from a silly joke to something worth something to people very quickly, and a community was developing fast, with lots of shady people and lots of new people, quickly putting up services and infrastructure around it”.
Nevertheless, the hypothesis that among those who buy Dogecoin, the vast majority do so only because they believe they will make money by selling it, or using it, at a higher price, seems plausible to say the least. The same is probably true of Bitcoin, but at least its deflationary nature makes it more reasonable to assume that it will gain value over time.