The original Wolf of Wall Street, Jordan Belfort, says that low-cap altcoins have one crucial similarity to penny stocks, or stocks worth less than $1 per share.
In a new interview with Yahoo Finance, Belfort says the two types of assets share one key trait, that being if investors get into them early enough, they stand to make a lot of money.
“Yes, you’re right, with those ultra low cap deals. If you get a hold of one of those things at the right time, you can make just massive, massive amounts of money.
But the flip side of that [is] that you’re playing in someone else’s playground. You’re not the house, they’re the house, and you’re coming in there and most of the time you’re probably going to lose.”
The veteran trader then says that even well-informed investors are taking a risk when they invest into low-cap crypto tokens. According to Belfort, the best way to win when buying these assets is to get in as early as possible.
“I don’t think there’s any amount of research you can do to protect yourself from ultra low-cap except getting in really really early because it doesn’t matter if it’s good [or bad] management.
[When] they’re that low, what’s going to end up happening is it’s gonna take it’s ride up and then when it gets to the top, people [are] going to dump it again. I am not saying a rug pull per se, just that they all have the same predictable cycle.
They go up, and once they crater they seldom come back so you have to get into these things the moment they come out and they’re publicly on the decks, or better still is before that on some kind of launch platform or even better on a Series A [fundraising round] or a seed round.”
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