Jordan Belfort, a former stockbroker has compared low market cap crypto assets to penny stocks, as reported by Cointelegraph.
Highly speculative shares from tiny, unheard-of enterprises are referred to as penny stocks. Typically, they either provide enormous returns for investors or severely fail.
In a recent interview with Yahoo Finance, Belfort stated that such investments have the “same predictable cycle” which can yield huge returns but can harm investors who don’t withdraw their money at the appropriate moment.
“With those ultra-low cap deals, wow you get a hold of one of those things at the right time you can make just massive, massive money. But on the flip side of that you’re playing in someone’s playground, you know you’re not the house, they’re the house,” Belfort added.
In addition, Belfort noted that low-cap crypto assets should never be considered a serious investment and that consumers should only engage in them if they are ready to risk a tiny portion of their wealth. Belfort is one of many well-known investors who have changed his mind about cryptocurrencies over the past two years, joining the likes of Shark Tank investors Mark Cuban and Kevin O’Leary.
The commodity was the “ideal storm for manipulation” at the time, according to Belfort, who predicted the price of BTC would eventually fall to zero in February 2018. At that time, the market was extremely thin. Additionally, he questioned whether BTC was more than just an investment instrument and said that it should be legislated out of existence, Cointelegraph noted.
(With insights from Cointelegraph)
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