The cryptocurrency market is experiencing one of the longest periods of decline, as investors focus on the lowest possible price. Amidst the ongoing market uncertainty, investors are also looking for ways to weather conditions in anticipation of a rally ahead.
In fact, former stockbroker known as the “Wolf of Wall Street,” Jordan Belfort, had previously shared tips on how to manage the market during periods of high volatility. So Coinphony has collected the following key tips from Belfort for navigating the market correction:
Tip #1: Get a Bitcoin time horizon of 3-4 years
The investor argued 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 run. Notably, as reported by Coinphony, Belfort claims that Bitcoin will continue to rise while acknowledging that he was wrong in his initial prediction that the asset would return to zero.
“If you take the horizon of three, four, five years, I’d be shocked you didn’t make money because the underlying fundamentals, I think, are really strong, and I think it’s just a matter of time that you know enough of it ends up in the right hands,” he said. The supply is limited, he said.
He believes that the potential of Bitcoin will be realized when the crypto sector becomes fully regulated.
Tip #2: Look no further than Bitcoin and Ethereum
With thousands of cryptocurrencies in existence, Balfour believes investors should focus on Bitcoin and Ethereum (ETH), indicating that the two assets have strong fundamentals. For Bitcoin, Belfort suggested that limited supply and an increasing adoption curve are two major catalysts that could lead to a rally.
He notes that the asset has gone beyond being a hoax, saying that the major cryptocurrency will survive the current downturn in the market, which he calls a “purging.” According to Balfour:
“Bitcoin is the thing that is going to survive this purge; it won’t be anywhere soon. An example of Ethereum is very similar. This was the first cryptocurrency that actually had a kind of universal decentralized finance (DeFi) use case for people to build other technologies on. So you have Ethereum.” There, which has also been butchered, but if you’ve been using Ethereum for a long time, you know, and again nothing is guaranteed, chances are in the next three to five years it will come back to the next bull cycle.”
However, he cautioned that unlike Bitcoin and Ethereum, most current assets are not yet proven, but acknowledged that some assets may survive.
Tip #3: Don’t panic
According to Belfort, with the cryptocurrency market grappling with widespread fear, investors should not play in a panic and sell off. He believes that the current correction is a form of getting rid of weak assets. He noted that money is being made in such circumstances, but investors need to find the right moment to re-engage.
“Now you are ready to panic and sell your Bitcoin and Ethereum. I will never tell you what to do, but take a deep breath and pay attention to this, and don’t play in a panic. The entire crypto world is paralyzed by fear, so does that mean you should buy? In large numbers right now? Well, I’m not saying that, but I’m saying that if I go back in history, these are the moments in time when the most money is being made in the market right now,” Balfour said.
After peaking in 2021, the cryptocurrency market corrected significantly in 2022, driven by several factors, including the prevailing macroeconomic conditions. Even as the market tried to find a bottom for assets like Bitcoin, the FTX crypto crisis eroded profits after the trading platform suffered a liquidity crunch amid allegations of customer funds embezzlement by CEO Sam Bankman-Fried.
The crisis arose after it was revealed that Bankman-Fried’s business empire consists of two major entities – cryptocurrency exchange FTX and his trading company Alameda Research. Notably, the relationship between the two entities was unethically close, given that Alameda’s financial statements showed that its financial basis consisted mostly of the original FTX token, FTT.
As a result, the market has spent more than $150 billion in capital, and the FTT token ranks among the hardest hit assets. At one point, the token corrected more than 80% with about $2.5 billion in capital outflows.
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3 Crypto Tips appeared after J. Belfort’s “The Wolf of Wall Street” Alive Market Crash for the first time on Coinphony.