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Jordan Belfort, popularly known as the “Wolf of Wall Street,” has said that low cap cryptocurrencies were like penny stocks. The two have similarities, such as experiencing extreme price volatility.
Wolf of Wall Street says low cap cryptos are speculative
Belfort is a former stockbroker who has said that cryptocurrencies with a low market capitalization are the same as penny stocks. Penny stocks are highly speculative stocks that trade under $1. Such shares belong to small and unknown companies, and while they can offer massive returns to holders, they can cause massive losses.
In an interview with Yahoo Finance on August 27, Belfort said that investing in low cap crypto assets had the same cycle as penny stocks, where high returns are generated, but investors can also experience massive losses.
Belfort advises those investing in these low cap cryptos that when one invests at the right time, they can make massive returns. He also said people should only allocate a small amount of their portfolio to such assets.
Your capital is at risk.
He also said that research was not enough to protect investments from these low cap cryptocurrencies except when one invests early enough. According to him, when such assets reached the top, people tended to dump them, which caused massive losses.
Bitcoin and Ether are good for long-term investments
The Wolf of Wall Street also said that he was interested in Bitcoin and Ether and assessing how they would perform as long-term investments because of their solid fundamentals.
Belfort added that he was interested in Bitcoin because of its use as a store of value and an inflation hedge. He also said that the asset would gain with time because the supply was limited. Therefore, when Bitcoin attained maturity, it would start being used as a store of value and not as a stock supporting growth.
Belfort has not always been enthusiastic about cryptocurrency investments. In February 2018, Belfort had said that Bitcoin would eventually crash to zero, saying that the asset was prone to manipulation. In a recent interview with Yahoo Finance, Belfort said that he was wrong about Bitcoin dropping to zero.
He also added that while he supports some of his criticism, the mainstream adoption of Bitcoin and cryptocurrencies and the understanding that the sector would not face an outright ban.
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