Indeed, former stockbroker, commonly known as the “Wolf of Wall Street,” Jordan Belfort, has previously shared tips on handling the market in phases of high volatility. Finbold has therefore compiled the following keys tips by Belfort on navigating the market correction:
Tip #1: Have a time horizon for Bitcoin of 3-4 years
The investor has maintained that Bitcoin (BTC) is a long-term store of value and can generate returns after at least three years. According to Belfort, Bitcoin has strong fundamentals that make it more attractive in the long term. Notably, as reported by Finbold, Belfort asserted that Bitcoin is bound to keep rising while acknowledging he was wrong on his initial projection of the asset going back to zero. He believes that Bitcoin’s potential will be realized once the crypto sector becomes fully regulated.
Tip #2: Don’t look beyond Bitcoin and Ethereum
With thousands of cryptocurrencies existing, Belfort believes investor focus should be on Bitcoin and Ethereum (ETH), suggesting that the two assets have strong underlying fundamentals. For Bitcoin, Belfort suggested that the limited supply and the rising adoption curve are two key catalysts that can trigger a rally. He notes that the asset has moved beyond being a scam stating that the flagship cryptocurrency will survive the current market downturn, which he referred to as a ‘cleansing.’ According to Belfort: However, he warned that beyond Bitcoin and Ethereum, most of the existing assets are yet to prove themselves but acknowledged that some assets might survive.
Tip #3: Don’t play into the panic
According to Belfort, with the cryptocurrency market grappling with widespread fear, investors should not play into the panic and sell. He believes the current correction is a form of getting rid of weak assets. He suggested that money is made in such conditions, but investors need to look at the right moment to get involved again. After hitting highs in 2021, the crypto market has significantly corrected in 2022, driven by several factors, including the prevailing macroeconomic conditions. Although the market attempted to find a bottom for assets like Bitcoin, the FTX crypto exchange crisis has eroded the gains after the trading platform was hit by a liquidity crunch amid allegations of customer funds misappropriation by CEO Sam Bankman-Fried. The crisis emerged after it was revealed that Bankman-Fried’s business empire comprised two large entities –FTX crypto exchange and his trading firm Alameda Research. Notably, the relationship between the two entities was deemed unethically close, considering that Alameda’s financial data showed that its financial foundation mostly entailed FTX’s native token, FTT. Consequently, the market wiped out over $150 billion in capital, with the FTT token ranking among the most hit assets. At some point, the token corrected by over 80% with about $2.5 billion in capital outflow. Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
