Bitcoin price rise baffles ‘Wolf of Wall Street’ as cryptocurrency rises above $7,000

'I was a scammer,' Jordan Belfort said. 'I had it down to science, and it's exactly what's happening with bitcoin'

(Reuters)

A notorious Wall Street broker has called bitcoin investors "brainwashed" despite sustained price gains for the cryptocurrency.

Jordan Belfort, whose crimes formed the plot of the Hollywood film The Wolf of Wall Street, said in a series of interviews with CNBC that bitcoin could be worthless by the end of the year, and that it will be "the bust heard around the world" when it happens.

"I was a scammer. I had it down to science, and it's exactly what's happening with bitcoin. The whole thing is so stupid, these kids have gotten themselves so brainwashed" Mr Belfort said.

"This thing is going to evaporate like a mirage. There's a lot of really honest people who are going to get slaughtered."

Leonardo DiCaprio depicted Jordan Belfort in the 2013 film The Wolf of Wall Street (AP)

But despite such predictions, the price of the world's most valuable cryptocurrency continues to rally. On Tuesday, bitcoin broke above $7,000 for the first time since early August and continues to trade above that price point.

The gains have also come despite recent bad news surrounding the cryptocurrency, with the US Securities and Exchange commission (SEC) rejecting a ruling that could have a major impact on bitcoin's future.

The ruling relates to an application for a bitcoin exchange-traded fund (ETF), which would track bitcoin futures contracts. In making its decision, the SEC cited fraud and manipulation concerns of bitcoin markets.

Another proposal for a bitcoin ETF is set to be ruled on before 30 September, which could be why the price has not been impacted.

Cryptocurrency analysts said it was too soon to say whether the recent momentum is the start of a more prolonged price recovery, with one warning investors to "not get carried away".

Matthew Newton, who works as an analyst at the online investment platform eToro, said: "The reaction to the recent ETF rejection was more muted than many expected – which is obviously a positive. The fact that negative news didn't move the market lower suggests sellers may be running out of steam for now."

He added the climbing higher above $7,200 "remains challenging," due to an imbalance between short and long traders currently invested in the cryptocurrency market.