Low cap crypto is like penny stocks, says Wolf of Wall Street
Former stockbroker Jordan Belfort, known colloquially as the “Wolf of Wall Street” has likened low market cap crypto assets to penny stocks due to their extreme price volatility.
Penny stocks refer to highly speculative shares priced under $1 from small and unknown companies. Generally they either fetch massive returns for investors or crash and burn dramatically.
Belfort's rise to prominence in the 90s and eventual run in with the Securities and Exchange Commision (SEC), was in part, due to brokering deals for these stocks.
During an interview with Yahoo Finance on Aug. 27, Belfort noted that these types of investments have the “same predictable cycle” which can generate huge returns but can also burn investors who fail to cash out at the right time:
“You’re coming in there and most of the time you're probably gonna lose,” he added.
Belfort went on to note that people should only invest in low cap crypto assets if they are willing to allocate a small amount of their portfolio to taking gambles, and suggested that they should never fall under the category of a serious investment.
“I don’t think there’s any amount of research that you can do to protect yourself from these ultra low cap [assets], except getting in really, really early. It doesn’t matter if it's good management [or] bad, they’re that low that what's gonna end up happening, it's gonna take its ride up, and then when it gets to the top, people are gonna dump it.”
The Wolf of Wall Street also noted however, that he is primarily looking at Bitcoin (BTC) and Ether (ETH) in relation to long term investments due to their strong fundamentals. He stated he is particularly interested in BTC due to its potential to become a store of value and inflation hedge once the
Read more on cointelegraph.com
