Jordan Belfort, who spent almost two years in prison for cheating investors, warned that bitcoin is full of "scammer" and "there's no good reason" about why it should exist.
The former stockbroker said it was "scandalous" to think that governments will allow bitcoins to continue as anonymous digital currency.
Speaking Monday at CNBC, Mr. Belfort said: "I was a scammer, I had it with science, and that's exactly what's happening with bitcoin.
" Everything is so stupid, these boys have made such a brainwashing. "
I was a fraudster, I thought about science, and that's exactly what's happening with bitcoin
Mr. Belfort explained his reasoning and said: "Bitcoin is not a scam, I do not think so.
"What is happening is that there are scams around perpetuating because by its very nature it is a dark market – you can not see what happens behind the scenes and people dive into it and use it to snatch more."  if there should be criminal charges against the so-called scammers, he said: "Of course there should be
" 95 percent of people with bitcoins are totally legitimate. But it is five percent that kills every time. So, yes, if people who are cheating should go to jail.
"Those who are not cheating, well, I feel bad because they will probably lose all their money or most of them."
Mr. Belfort, who ran the brokerage firm Stratton Oakmont, said the bitcoin linked to encryption of cryptocurrency tokens is related to "scams" in the digital currency.
The Tether is meant to be supported one by one by the US dollar, with the idea that the currency should have the stability of dollar prices combined with the operational ability of a cryptocurrency.
But Mr. Belfort said: "My hypothesis is that you will find out, probably with this tether connected to bitcoin, it is used to make a kind of, you know, should be one by one with the dollar.
"My hypothesis is that there has never been one on one and is being investigated at this time. When it comes to light, it will be a disaster for the entire basket of encrypted. This is my hypothesis. "
The price of the Bitcoin is $ 7,048.06 at 17:07 BST, Tuesday, according to CoinDesk.It saw its highest price in December when it touched almost $ 20,000.
The bitcoin has jumped over $ 200 during the night of Monday in an unexplained increase in price.
The early hours of Tuesday morning saw bitcoins pass from $ 6,766 to $ 6,900 less
Bitcoin was praised by the confident encryption experts with Thomas Lee of Fundstrat saying that the correlation of cryptocurrency between emerging markets indicates that the bitcoin could end 2018 "explosively higher" than ever.
The price of the bitcoin: Wolf of Wall Street says that investors are "subjected to brainwashing "
Mr. Lee of Fundstrat Global Advisors said there is an" important correlation "between emerging markets and bitcoin.  Speaking to CNBC, Lee said:" In general, we think that mining and fundamental factors such as the network effect underlie the value of bitcoins. But macro factors have an effect on the value of the network. "
Mr. Lee referred to a chart showing two lines: the MSCI emerging market index for the S & P and bitcoin price.
He said:" EM has actually gathered to the end of the year we had a huge bitcoin rally and since EM fell, we saw the bitcoin fall sharply.
"Could you ask yourself what the link is? Why do we think they are connected?" Well, there are two factors.
"The first is hedge funds, which usually sell emerging market stocks. So you risk, you risk. When they are at risk, bitcoins also suffer because they are at risk.
"The second reason has to do with the wealth effect.Wealth effect means that if you're living in an emerging market and you see that your stock market crashes enormously it means you have a lot less money to buy bitcoins so that influences the net effect because you can not buy bitcoins.
I think there are two reasons why an emerging market index actually influences the bitcoin. "
Mr. Lee explained the trend and later said: "Until emerging markets start spinning, I think somehow the correlation will hold us up and tell us that the kind of risk on the mentality is that buyers do not buy bitcoins."
The expert in cryptocurrency bullish said that if the dollar weakens and the Federal Reserve will stop its policy on rising rates, then both areas of the market could increase.
Lee said: "I still think it's possible."
He added: "Bitcoin could close the year exponentially higher."