“bitcoin is a long-term hedge”
Jordan Belfort, the former stockbroker whose story inspired the hit film The Wolf of Wall Street, has warned against taking a “12-month or 24-month horizon” when investing in bitcoin (BTC-USD).
While speaking on Yahoo Finance’s new show The Crypto Mile, the man whose memoirs inspired the 2013 Martin Scorsese film advised investors to see bitcoin as a long-term hedge against inflation.
He said that when you invest in bitcoin, “with reasonable luck, I think if you take a 24-month horizon you will almost certainly make money”.
“If you take a horizon of three or maybe five years, I would be shocked if you did not make money because the underlying fundamentals of bitcoin are very strong,” he said.
“It has a limited supply, and as inflation continues to rise, there will come a time when bitcoin will start trading more as a value store and less as a growth stock.”
Watch: The Crypto Mile – Jordan Belfort talks about bitcoin and cryptocurrency
At the moment, bitcoin has fallen below the psychological level of $ 20,000 to values not seen since 2017.
Bitcoin now stands at $ 19,110, down over 10% in the last seven days.
Ethereum (ETH-USD), the second largest cryptocurrency in terms of market value, has fallen to $ 1,050, down 1% in the last 24 hours.
These days, Belfort is a public speaker, author and sales coach, and he describes two types of investments for the crypto area, one of which is to focus on protocols with long-term basics.
The second is to put a small amount into crypto projects with ultra-low market value that have the potential to make big money if you come in early.
Read more: Crypto live prices
The former Wall Street stockbroker said that for cryptocurrencies with ultra-low values, it is best to get in before they are publicly traded on stock exchanges, and investors should buy in when the project is “offered on a launch pad, or a Series A or a seed round”. .
Crypto launchpads, often referred to as IDO platforms, are decentralized exchange platforms for launching new coins, crypto projects and raising liquidity.
An important cryptocurrency launch ramp is BSCPad, the first decentralized IDO platform on large cryptocurrency blockchains, Binance Smart Chain (BSC).
But on these bets, Belfort announced “that most of the time you will lose and be prepared to lose everything”.
At the moment, bitcoin is behaving like a technology stock and correlating with Nasdaq (^ IXIC).
This correlation makes sense for Belfort: “It does not surprise me once that it does, and it would be more surprising if bitcoin already acted as an inflation hedge because it is still very incipient”.
He added: “There is no real institutional ownership in bitcoin, for example, you do not have a teacher pension fund that owns bitcoin for a ten-year hedge, it is not like that yet.”
Read more: How the EU plans to regulate the crypto market
He said it would require regulation for institutional money to flow into the sector, describing the fraudulent activity in traditional markets as piecemeal compared to the scary actions in crypto markets, “where people are slaughtered”.
“In crypto you can go out and collect money, but there is no disclosure, and every time there is no disclosure, it always ends badly.”
His advice to investors is to keep a close eye on the management team behind cryptocurrencies, adding that “if you do not know who owns a protocol, then it is a big concern for me”.
His other advice is to look at the usefulness of the crypto project, and say that the best test for a blockchain project is “if the idea works better from a centralized server, I probably would not be involved”.
