Jordan Belfort, ‘Way of the Wolf’ author and the original “Wolf of Wall Street”, is speaking out on Bitcoin, warning investors of the speculation surrounding the cryptocurrency.
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According to Belfort it isn’t Bitcoin itself that is the issue, but the fever pitch surrounding the cryptocurrency’s trading, telling the FOX Business Network’s Stuart Varney, “People all over the world who know nothing about what they’re buying, they’re just operating with the greater fool theory, meaning if there’s someone more foolish than me, you’ll buy it a higher price than it’s a great price where it is. There’s no value, it’s just pure speculation.”
Belfort compared the trading of Bitcoin to the mortgage market before the financial crisis.
“It reminds me exactly of 2005, 2006 in the mortgage market when you’re getting your haircut and your haircutter says ‘oh, I also sell mortgages now...,’ it’s like everybody and their grandma became involved in real estate and mortgages, that’s what’s happening with Bitcoin.”
Belfort sees a potential Bitcoin bubble ahead, saying on “Varney & Co.,” “It’s not at the top yet, so it could go higher for all I know, but in the end after enough people have bought and you can’t support the bubble it’s going to crash so hard and fast.”
Though Belfort raised concerns about the trading of Bitcoin, he said he isn’t opposed to the idea of a cryptocurrency.
“My point is not that the fundamental idea of a cryptocurrency is bad. I think it’s a good idea, but what’s run amuck right now is people using it as, it’s turned to speculation and people are going to get destroyed.”