THE real-life Wolf of Wall Street has slammed Bitcoin as a “huge, gigantic scam” and has warned would-be investers not to waste their cash.
Jordan Belfort believes the controversial cryptocurrency is in a bubble and could be set to plummet in value soon.
The former stockbroker, whose market manipulation and fraud crimes in the 1990s were subject of the 2013 film starring Leonardo di Caprio, said:“Promoters are perpetuating a massive scam of the highest order on everyone.
“Probably 85 per cent of people out there don’t have bad intentions but the problem is, if five or ten per cent are trying to scam you.”
Belfort said he expected the price of Bitcoin to rise further in the short term before an eventual collapse in the market.
He likened it to Holland’s “tulip mania”, where the value of tulip bulbs grew exponentially in the 17th Century before a rapid fall in prices.
In an interview with CNN he said: “I think it’s a huge danger right now that people are looking at this as the next great thing, it’s a bubble for sure.
“The next stage, you will see it really skyrocket, there will be a short squeeze, it will go even higher and then eventually it will come caving in, it’s almost a guarantee.”
His comments come after a businessman who made millions from Bitcoin also warned potential buyers not to waste their money.
Minted Grant Sabatier, 32, said throwing savings at the controversial cyber cash is a “terrible idea”.
Sabatier, who reached his goal of making $1million (£747,860) by age 30, first invested $5,000 (£3739) in Bitcoin in 2013 at $72 (£53.85) per coin.
And although his investment is now worth a staggering $1,148,720, (£859,081,74), he says people should think twice before following suit – because the Bitcoin is “impossible to value”.
Writing for CNBC, he said Bitcoin is “short-term gambling, not investing”
Sabatier, who lives with his wife in Chicago, wrote: “I first invested $5,000 in bitcoin back in 2013 at $72 per coin and now own approximately 69.2 Bitcoins.
“I decided to buy as a long-term experiment and used less than 1 percent of my net worth at the time to buy into Bitcoin. Sure, I wanted to make money on it, but if I lost everything, it wasn’t going to change the course of my life.
“Bitcoin is trading at $16,600 (£12,414.48), which makes my Bitcoins now worth $1,148,720 (£859,081,74) It took me five years working 80-hour weeks to make over $1 million (£747,860) saving and investing in the stock market.
It’s by far, without a doubt, the easiest money I have ever made. But I don’t recommend you invest in Bitcoin today.”
Describing Bitcoin as a “global craze” that “even my barber who has no idea what a blockchain is buying”, Sabatier added: “It’s (Bitcoin) impossible to accurately value. When the price of anything fluctuates 20-30 percent in one day, it’s obviously unstable, so you could lose all of your money very quickly.
“If you need your money in the next year, don’t buy bitcoin. With the insane short-term fluctuations, Bitcoin is short-term gambling, not investing.”
Sabatier, who is the founder of Millennial Money, where he writes about personal finance, also warned that cyber wallets could get hacked regularly.
He further said that, because there is no central governing body to guarantee Bitcoin, it can be disfficult to get back if lost.
He said: “You might think that digital wallets are secure, but cryptocurrency exchanges and wallets continue to get hacked regularly. More than $70 million (£52, 502,000) in Bitcoin was hacked from NiceHash, a Bitcoin mining marketplace, last week.
“Just because exchanges like Coinbase have $200 million (£149,572,000) in venture funding and a nice shiny marketplace doesn’t mean that they can’t get hacked either.
“Because there is no central governing body guaranteeing your bitcoin, if you lose it, it can be difficult to get back. If it gets stolen, then you are out of luck. Hacks will continue to happen.”
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