Jordan Belfort, the infamous “Wolf of Wall Street” has joined the list of Bitcoin detractors, calling it a “fraud” in an interview with Scott Gamm for The Street.
Explaining his biggest issue with the world’s leading cryptocurrency and why he isn’t interested in it, he said:
“The biggest problem I see with Bitcoin...why I would never buy it...is that they can steal them from you, like they can them through your phone or something...I know people who lost all their money like that...”
Belfort went on to criticize Bitcoin for not having any backing compared to fiat, where central banks provide assurance.
“...it is backed by nothing other than a program that creates artificial scarcity, it seems kind of bizarre to me...’
Belfort’s comments come in the wake of JPMorgan’s CEO, Jamie Dimon’s scathing remarks about Bitcoin. Dimon too labelled Bitcoin a fraud, denouncing it as a currency fit for murderers and drug dealers.
Dimon also stated that Bitcoin was in a speculative bubble, likening it to the 17th century Tulip Mania:
“It's worse than tulip bulbs. It won't end well. Someone is going to get killed.”
Similar sentiments were also echoed recently by Ray Dalio, who runs the largest hedge fund in the world:
"It's not an effective storehold of wealth because it has volatility to it, unlike gold. Bitcoin is a highly speculative market. Bitcoin is a bubble."
Belfort, a former stockbroker, pleaded guilty to stock-market manipulation and pump and dump penny stock frauds in 1999. He served 22 months in prison and was the inspiration behind two of Hollywood’s most popular movies – Boiler Room and The Wolf of Wall Street.
He too hinted at Bitcoin bubble that would burst at some time, saying:
“There will be a time when everybody is freaking out about Bitcoin and dumps it and God knows what’s going to happen...”
However, he acknowledged that cryptocurrencies are here to stay and it is very likely that central banks would launch their own currencies.
His final advice to Bitcoin investors was to be careful and consider all the risks:
“I am not saying you should or shouldn’t buy Bitcoin, what I am saying is that I personally, myself, would be very very careful about investing a lot of money in something that could vanish very quickly.”