Small-Cap Crypto Is Like Penny Stocks, Says Wolf of Wall Street

"I don't think there's an amount of research you can do to protect yourself from these ultra-capped [assets] low, except get very, very early,” Jordan Belfort said.

Former stockbroker Jordan Belfort, known colloquially as the “Wolf of Wall Street,” compared low-cap crypto assets to penny stocks because of their extreme price volatility.

Penny stocks refer to highly speculative stocks priced below $1 from small, unknown companies. Typically, they either generate massive returns for investors, or they crash and burn dramatically.

Belfort's rise to prominence in the 1990s and its eventual encounter with the Securities and Exchange Commission (SEC) were partly due to brokerage arrangements for these stocks.

In an interview with Yahoo Finance on August 27, Belfort noted that these types of investments have the “same predictable cycle” that can generate huge returns but can also burn investors who fail to cash in. at the right time:

"With these very small cap deals, wow, you get one of these things at the right time, you can make huge, huge money. But on the other hand, you're playing in the land of someone's game, you know you're not home, it's home.

"You get there and most of the time you're probably going to 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 portion of their portfolio to making bets, and suggested that they should never fall into the serious investment category.< /p>

"I don't think there's an amount of research you can do to protect yourself from these ultra-low cap [assets] except to get in really, really early. It doesn't matter if it's from good management [or] bad management, they're so low that what's going to eventually happen, it's going to skyrocket, and then when it gets to the top, people are going to throw it away.

The Wolf of Wall Street also noted, however, that he was primarily interested in Bitcoin (BTC) and Ether (ETH) over long-term investments due to their strong fundamentals. He said he was particularly interested in BTC because of its potential to become a store of value and a hedge against inflation once the market matures further in...