On Monday (27 August 2018), Jordan Ross Belfort, the former American stockbroker who spent 22 months in prison for running pump-and-dump scams that led to investor losses of approximately $200 million, warned investors of the dangers of investing in Bitcoin. Belfort’s first memoir formed the basis for the 2013 movie “The Wolf of Wall Street” starring Leonardo DiCapri.
In a documentary titled “Bitcoin: Boom or Bust” airing on CNBC on Aug 27th (at 6pm Eastern Time), he told CNBC:
“I was a scammer. I had it down to science, and it's exactly what's happening with bitcoin. The whole thing is so stupid, these kids have gotten themselves so brainwashed.”
“This thing is going to evaporate like a mirage. There's a lot of really honest people who are going to get slaughtered.”
Belfort explained what was his biggest issue with Bitcoin:
“My problem with not just Bitcoin, but the current crop of cryptocurrencies, is more to do with the fact that the world governments will not allow this to have traction on any level… There's no way they are going to allow this after years of clamping down on Switzerland, they are going to say 'yeah, let's have an anonymous global currency… It's outrageous to think that they'll allow this to take hold… The central banks don't want it because they need to control the money supply.They spent all this time trying to stop money laundering. So, why now allow something that is anonymous that lends itself to make money laundering very easy and hard to track down… There's no way that it is in their best interests to do that that. I don't believe there's any shot in the world will let that happen.”
He pointed out that Bitcoin itself was not a scam:
“Bitcoin itself is not a scam… What's happening is that there's scams around it being perpetuated because by it's nature it's a dark market… you can't see what's going on behind the scenes and people dive into that and use it to rip others off.”
When asked what if the financial regulators would step in to try to squash Bitcoin, he replied:
“They already have, and it will get far more agressive. And also, we don't know how bad it is yet. There's investigations that have been announced that are underway. And the wheels of justice grind slowly, but they do grind forward, and I am extremely confident that you'll see when truth comes out, you'll see what happened over the last couple of years. You are going to see massive fraud, manipulation, issues with Tether, which is linked with Bitcoin… So, there's huge problems, I believe, regulatory wise, and you're seeing just the tip of the iceberg right now.”
Talking more specifically about Tether, he said:
“My guess is that you are going to find probably with this Tether that is linked to Bitcoin, you're supposed to have one for one to the dollar… My guess is that there was never one for one. It is being investigated right now, and when that comes to light, it's going to be a disaster for the whole basket of cryptos. That is my guess… The evidence that I have seen right now says there's not [enough U.S. dollars to back each tether that is actually being circulated].”
“Guys, I have told you that Bitcoin was going to get destroyed when it was $18000-19000… This is just the beginning of the end… It has the ability to go to zero… This is all based on 'The Greater Fool Theory'. I know this better than anyone in the world… Get out if you don't want to lose all your money…. When it really cracks, you are not going to be able to sell on the way down… There's no utility. It is an energy disaster… You are on a sinking ship… If you think $6100 is anywhere close to the bottom, you are f****ing crazy. Save your freaking money. It is mass delusion.
He did say, however, in the same video, that he believed in blockchain technology:
“I am a believer in blockchain technology… I think there will be great cryptocurrencies out there at some point in time… You can be pro blockchain technology and not pro Bitcoin. They are not the same thing. It would be one thing if Bitcoin owned Blockchain technology and everybody had to license it. That would be a different story, guys.”
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