“[Bitcoin] is all based on the Great Fools Theory,” Belfort says in a recent YouTube video. “I know this better than anyone in the world. I’m not proud of that, but I do.”
Belfort says bitcoin’s price surges are thanks only to a belief by buyers that there will continue to be ‘greater fools’ who they can sell the asset to at a higher price.
“There’s no fundamental value [with bitcoin], it’s all based on the next guy and the next guy,” he says. “Get out if you don’t want to lose all of your money because … there’s a very good chance it’s going to crack. And when it really cracks, you’re not going to be able to sell on the way down, there will be no liquidity.”
The Greater Fools Theory is an idea Belfort himself profited from at Stratton Oakmont.
He served 22 months in a California prison after pleading guilty in 1999 to a seven-year scheme at his Long Island brokerage, Stratton Oakmont, whichmanipulated the price of stocks and left investors holding nearly worthless securities. According to Belfort, that experience has given him insight into a modern financial asset: Bitcoin.
Eulogy made by Jordan Belfort
