The guy who made tens of millions of dollars misleading American retirees into buying worthless pink sheet stocks says he agrees with J.P. Morgan Chase & Co. CEO Jamie Dimon’s comment that bitcoin is “a fraud.”
Jordan Belfort, the inspiration for Leonardo DiCaprio’s character in the 2013 Martin Scorsese film “The Wolf of Wall Street,” told the Street that he believes Dimon is right, adding that bitcoin “isn’t a great model.”
In what may eventually be revealed as an important distinction, Belfort’s take was somewhat more nuanced than Dimon’s. While the JPM CEO predicted that all digital currencies would eventually become worthless, Belfort said there might be room for one.
"I'm not saying cryptocurrencies, there won't be one – there will be one – but there has to be some backing by some central governments out there.
If any digital currency demonstrates long-term viability, it will probably be one that’s backed by a central bank."
Two weeks ago, Dimon sent the price of bitcoin tumbling when he called the digital currency a fraud and said he would fire any JPM traders caught trading it. He added that it made people like his daughter feel like “geniuses” for buying in early.
"It’s a fraud. It’s making stupid people, such as my daughter, feel like they’re geniuses. It’s going to get somebody killed. I’ll fire anyone who touches it."
Surprisingly, given bitcoin’s role in helping disrupt the financial services industry, not every Wall Street CEO shares Dimon’s dim view on the digital currency. Two days ago, Morgan Stanley CEO James Gorman told WSJ that he believes Dimon is wrong and that "bitcoin is certainly more than a fad.” However, he conceded that “there is a government risk to it” – alluding to Chinese authorities’ decision to shutter local bitcoin exchanges. Joining Dimon and Belfort in the skeptics’ corner is Bridgewater Associates Founder Ray Dalio, who said last week that he believes bitcoin is in a bubble.
Circling back to Belfort, he explained to the Street that he just couldn’t wrap his head around bitcoin…
“Basically, the idea that it’s being backed by nothing other than a program that creates artificial scarcity it seems kind of bizarre to me.”
He also claimed that he knows people who lost money in the Mt. Gox hack, and that the incident served as a wakeup call.
“They could steal it from you I know people who have lost all their money like that..."
Of course, Dimon’s statement didn’t stop JP Morgan Securities from transacting in a bitcoin-linked exchange-traded product traded on Nasdaq Stockholm, prompting an algorithmic liquidity provider called Blockswater to sue Dimon for "spreading false and misleading information" about bitcoin.
Traders, meanwhile, have continued to vote with their wallets: Bitcoin finally filled the “Dimon gap” yesterday, and has continued to climb on Thursday...