Greater fool theory is what Bill Gates described crypto is.

I asked ChatGPT and it describes as:

The greater fool theory is a concept in finance that suggests that it is possible to make money by buying securities, assets, or other investments, not because they are fundamentally valuable, but because you expect to be able to sell them to someone else for a higher price later on. The idea is that even if you think an investment is overvalued, you can still make money as long as you can find a "greater fool" than yourself who is willing to pay an even higher price for it.

The theory is often used to explain speculative bubbles, where prices of assets become inflated beyond their intrinsic value due to demand from investors who are hoping to sell to someone else at an even higher price. Eventually, the bubble bursts when there are no longer enough "greater fools" to keep the price inflated, and the price of the asset falls back down to its intrinsic value or below.

It is important to note that the greater fool theory is not a solid investment strategy, as it relies on the assumption that you will be able to find someone willing to pay a higher price for an asset that you believe is overvalued. In reality, there is no guarantee that this will happen, and relying on the greater fool theory can lead to significant financial losses.

It is similar to a bagholder in which someone bought crypto at a high price level and left in the dusk when the crypto price dropped significantly.

There isn't just this theory that setback of the crypto; another one is to the commodity.

What happened in 17th century is that gold was used to store in the goldsmith to return with a certificate of deposit.

Those greedy goldsmiths then loan gold out to earn interest while they loan more than they can afford to.

When the economy got worse and people wanted their gold out, many goldsmiths went bankrupt because they could no longer provide gold or they disappeared because they were worried about getting caught.

We forgot this part of the history and jumped into crypto too soon to realize the thing is happening repetitively. 

We must wait a bit more to see how it plays out.

Photo by Nicolene Olckers on Unsplash