- Jordan Belfort, who ran a now-defunct Long Island brokerage and pleaded guilty to stock manipulation, is predicting disaster for bitcoin.
- His story was depicted by Leonardo DiCaprio in Martin Scorsese’s “Wolf of Wall Street.”
- “There’s a lot of really honest people who are going to get slaughtered,” Belfort says.
Former penny-stock broker Jordan Belfort spent nearly two years in prison for scamming investors. Bitcoin, he has no doubt, is the next trap that could leave some retail investors penniless.
“I was a scammer. I had it down to science, and it’s exactly what’s happening with bitcoin,” he told CNBC in a recent documentary. “The whole thing is so stupid, these kids have gotten themselves so brainwashed.”
Belfort ran an over-the-counter brokerage house on Long Island called Stratton Oakmont, and pleaded guilty in 1999 to manipulating investors into buying stocks that eventually turned out to be worthless. The former broker’s story was depicted by Leonardo DiCaprio in Martin Scorsese’s “Wolf of Wall Street.”
In the internet age, that manipulation tactic has become easier. Cryptocurrency fundraising known as initial coin offerings in many cases turned out to be frauds and have become the target of Securities and Exchange Commission investigations. Google, Facebook, and Twitter have outlawed advertising of ICOs on their platforms.
“This thing is going to evaporate like a mirage,” Belfort said. “There’s a lot of really honest people who are going to get slaughtered.”
He predicted that it could go bust within the year, and when it does, it will be “the bust heard around the world.”
Belfort also challenged bitcoin’s security, the idea that it could dissolve a need for central banks, and the argument that governments would allow an anonymous currency without regulation.
“We don’t even know how bad it really is,” he said. “For the average person who’s really — you know, with a good heart, who walks in saying, ‘I just — I want — I do because I believe in it, in the long term thing,’ just f—— run.”
Belfort is in good company. Corporate leaders including Jamie Dimon, Ray Dalio and Bill Gates have challenged the validity of bitcoin, and Warren Buffett famously called it “rat poison squared”ahead of the Berkshire Hathaway shareholder meeting in May.
