Jim Cramer, the host of “Mad Money”, recently commented on Bitcoin and Gold, causing chatter in the crypto community. He has a history of making unpopular crypto recommendations, such as advising investors to sell their holdings before Bitcoin’s price skyrocketed, earning him the nickname “Inverse Cramer”. However, his recent negative remarks about Bitcoin were met with criticism from the crypto community, who saw it as a bullish sign for the cryptocurrency.
Market Performance Fail To Support Cramer’s Predictions
Jim Cramer recently made comments on Bitcoin and Gold which sparked a reaction in the crypto community. The host of the popular financial news show “Mad Money” on CNBC has a history of making incorrect predictions about cryptocurrencies.
Cramer is known to have convinced investors to sell their Bitcoin holdings before a major bull run, and this phenomenon where the events turn out to be opposite of the predictions is popularly referred to as “Inverse Cramer.” Naturally, Cramer’s recent bearish comments invited some criticism from investors who interpreted it as a “buy signal” for Bitcoin.
In the latest episode of Mad Money, Cramer likened Bitcoin to shares of leading technology firms like Facebook and Google, which are part of the Nasdaq 100 share index. He suggested that BTC is no different from shares of technology firms and urged investors to explore gold as an alternative to cryptocurrencies.
To support his argument, Cramer used a chart from DeCarley Trading that compares the performance of Bitcoin futures to the Nasdaq100, showing that both indexes began moving parallel to one another in March 2021.
Cramer went on to say that Bitcoin is neither a form of currency nor a secure store of value. This sentiment was echoed by the CEO of Euro Pacific Capital, Peter Schiff, who is also a vocal critic of the cryptocurrency sector and often advises investors to steer clear of it. On January 12, he commented that bitcoin’s surge above $18,000 at that time was an “excellent opportunity” for HOLDers to sell their holdings, presenting investing in gold as the better alternative.
However, investors who weren’t influenced by these comments were rewarded as the price continued to rise in the following days, reaching a 5-month high of nearly $23,300 on January 21, representing a 30% price increase from the day when Schiff made his statement.
Currently, BTC is worth approximately $23,250, consistent with where it was a week back. In contrast, Schiff, who is known to be a major advocate of gold, expected gold to perform better in the current market, but it has risen by only 1.3% over the past ten days.
Cramer’s Comments Influence Traders One Way or The Other
The “Inverse Cramer” narrative is continuously gaining momentum in the crypto community after Jim Cramer made negative comments about Bitcoin. The narrative is based on the idea that when Cramer makes negative comments about a particular asset or investment, that asset or investment is likely to go up in value.
This is because many traders and investors in the crypto community believe that Cramer’s comments are ill-informed or premature. One of the main arguments against Cramer’s comments on Bitcoin is that the TV personality is simply out of touch with the current state of the crypto market.
Bitcoin and other cryptocurrencies have been on a bullish run since the beginning of 2023, with prices wiping the taint suffered from the losses due to the FTX exchange collapse in November and revisiting 2022 highs. Cramer’s comments fail to account for the positive developments in crypto prices, and the “Inverse Cramer” narrative is a reflection of the growing skepticism that many traders and investors have about traditional financial experts and their ability to understand and analyze the crypto market.
Cramer’s commentary on Bitcoin has been interpreted as a “buy signal” by Dan Held, a crypto educator and marketing advisor at Trust Machines.Co. Investors have also noted the “Inverse Cramer” narrative playing out in the US stock market as well. Cramer’s bullishness on the stock market might pave the way for a decline in stock prices.
Bitcoin’s correlation with the S & P 500 is relatively high in 2023 and a decline in stock prices could have a similar impact on cryptocurrencies. Changpeng Zhao, the CEO of Binance, also critiqued Cramer’s recent crypto prediction, reminding the crypto community to “ignore the FUD.” Plus, it is important to note that Cramer’s comments should be taken with a grain of salt as his track record in predicting crypto prices is not particularly strong.
Will Jim Cramer’s Bitcoin Price Prediction Be Wrong Again?
Jim Cramer has consistently made negative statements about the cryptocurrency market, particularly the Bitcoin price. He advises caution for investors and suggests exiting investments related to the industry due to regulatory uncertainty.
Cramer has also called for investigation by the U.S. Securities and Exchange Commission and criticized the largest crypto trading platform, Binance, for lacking legitimacy. Despite the growing acceptance of cryptocurrency among investors, concerns about unreliable and unbacked digital assets persist in the industry.
Cramer has had mixed views on Bitcoin in the past, sometimes viewing it as a potential hedge against inflation and other times expressing skepticism about its long-term prospects. Currently, he holds a highly skeptical view of cryptocurrencies as Bitcoin failed to act as a store of value in 2022, where investors lost 70% of their investments in the number one token.
While these statements are retrospective on Bitcoin’s price performance, and to some extent, tailored to serve a narrative. They lack the necessary credibility when it comes to consistency with Cramer’s comments.
Cramer has been wrong about other coins as well, such as when he labeled popular crypto projects such as Solana and XRP as “Cons”, which later set out to increase by more than 40% in price. Cramer has had a history of being wrong and divided in his position on cryptocurrencies, which goes on to suggest that he is most likely wrong this time as well. At least, that’s what appears to be the case when we look at the market metrics.
Referred to as the “sham market” by Cramer, the cryptocurrency market cap has seen a 0.25% increase over the day and is currently at 1.06 Trillion. Bitcoin is currently trading at $23.2k, a level considered as comforting support. Ethereum, too, is trading at around $1.6k.
The current market sentiment is positive among investors. When investing in cryptocurrencies, investors should take into account necessary facts and not be influenced by popular opinions.
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