Jordan Belfort, who is the real-life inspiration for the ‘Wolf of Wall Street’ film, has branded Bitcoin a bubble and cautioned people that it is, in fact, a ‘scam’.
Belfort, who has experience in running a scam and has the prison time to prove it, is yet another crypto critic who has labeled the world’s most popular digital currency a bubble. He added that the value of Bitcoin will also drop.
In an interview with the Financial Times, Belfort said:
Promoters are perpetuating a massive scam of the highest order on everyone.
He went on to add:
Probably 85% of people out there don’t have bad intentions but the problem is if 5% or 10% are trying to scam you.
Bitcoin doesn’t seem to be aware that its price will soon be plummeting as Friday saw it sail past the $18k mark. According to Coinmarketcap, at the time of writing, it was trading at nearly $18,800, with $19k within touching distance.
2017: the Year of the Bitcoin
These record-breaking numbers come on the tail end of the currency’s most spectacular year yet. It was trading at just $1k in January and has grown by over 1,700% in 2017.
Since reaching five-figure status in November, Bitcoin has continued its upward trend. However, this month showed astronomical increases, with the digital currency growing by nearly 80%.
Seeming to work in tandem with this growth is the amount of criticism it receives, which ironically seem to make its price increase even more. In addition, the Bitcoin market seems to be reigning in its proclivity for volatility possibly due to the recent launch of CBOE’s futures trading.
Tulip Fever
No amount of positive press, forays into mainstream adoption, or price increases appear to deter naysayers. In fact, the more success Bitcoin has, the more it raises the ire of its critics.
Belfort recently told CNN:
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.
Like many other industry experts, Belfort has compared Bitcoin to Holland’s infamous ‘tulip mania’, meaning that Bitcoin’s fantastic price surges are in fact a precursor to its inevitable crash:
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.
He added:
If you were the most disciplined person and get in and get out, there is probably a short window to make some money. But that’s not human nature, people will get in and make some money and they want to make more money. In the tulip bubble, the beginning of the end was when they started trading futures on tulips, that was another move up and then all of a sudden it collapses and it’s over.
#bitcoin just keeps growing pic.twitter.com/uV0ilLQdDl
— VERTGAWD (@cryptocointee) November 4, 2017
It Just Keeps Growing
Adding his two virtual cents to the conversation is Andrew Bailey, head of the British government’s Financial Conduct Authority. He recently told the BBC that Bitcoin investors will “lose all their money”.
However, dire warnings and cautionary tales seem to be having no effect on the currency, as it continues its growth spurt. In fact, while writing this article, it’s price has increased by over $100. Bitcoin’s global adoption is also on the rise, as more emerging markets seem to be embracing, and trading, it.
Do you think Bitcoin will eventually crash, or will it prove its cynics wrong by reaching even greater heights this year? Let us know in the comments below!
Images courtesy of Reuters, Pexels