Bitcoin was created as a social experiment on alternative money, Wolf of Wall Street author Jordan Belfort said in an interview with FOX Business’ Stuart Varney, adding that the cryptocurrency itself isn’t a scam but the way it’s being traded is.
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“It’s not that Bitcoin is a scam – the technology behind bitcoin, blockchain, isn’t a scam, but the way it is trading is a scam,” Belfort told Varney, saying that there are people who have used this technology to create a massive manipulation, and a bubble.
Belfort pointed out that while bitcoin is theoretically a “currency,” it is not being used as one (except for a very tiny portion). “Most of the bitcoin out there is being used as an investment and there is very little bitcoin available, and any bit of buying drives up the price, as there’s only a small amount,” Belfort told Varney.
“It’s not that bitcoin is a scam – its that the price is related to nothing in reality,” he adds.
Varney told Belfort that, “We are told, about 1000 people got in early – they control 40% of all bitcoin – these insiders, it is in their interest to get the price up and sell as the ordinary investor, the little guy is just getting in.” To which, Belfort commented: “It’s even worse than that.”
There are a lot of limits to using bitcoin as a currency, and it is not being used, therefore, only a little bit of interest and drive the price up and it is creating a bubble right now. It’s a “massive bubble,” Belfort added.