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Former stockbroker Jordan Belfort compared small-cap cryptocurrencies to so-called “penny stocks”—cheap securities of little-known companies.
Jordan Belfort earnedpart of his fortune and fame was precisely because he traded in such stocks. But he stressed that such stocks, like small-cap cryptocurrencies, can make significant profits, but can also cost you money entirely.
“If you make transactions with crypto assets withlow capitalization at the right time, you can get a lot of money. On the other hand, you always know that other people are in control of the situation. You understand that you will often be in the red. And I don't think there's any research you can do to fully protect yourself from the collapse of small cap coins. Unless you invest in them at a very early stage. It doesn’t matter how the project is managed - if the cryptocurrency grows, then people will start selling it,” Belfort noted.
The former broker recalled that in such“penny” stocks or cryptocurrencies only need to invest a small portion of the portfolio. And for the long term, it’s worth choosing stronger cryptocurrencies, like Bitcoin or Ethereum.
He himself invested in BTC because of the potential of the first cryptocurrency to become a store of wealth and hedge against inflation. He expects this to happen as the cryptocurrency market matures.
Belfort has previously said that Bitcoin will be a store of value in the future, so it is a great investment for the long term.
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