It is hard to know whether the stock market pundit believed in the calls he made regarding bitcoin over the years. Still, many of those that listened to him likely ended up on the losing side of whatever investment they made.
In July, for example, Cramer warned of a possible probe into crypto exchange Coinbase by the U.S. Securities and Exchange Commission. “Very bad news” for the firm, he said. Just one week later, Coinbase’s stock soared by up to 50%.
People got angry. But it was not the first time it happened. Neither will it be the last. “Never take financial advice from Jim Cramer!” crypto podcaster, Tony Edward, shouted on Twitter at the time.
1 week later Coinbase rips. Lesson – Jim Cramer knows what you know. Nothing really. pic.twitter.com/B6yu8U4Kd5 — Jason A. Williams (@GoingParabolic) August 5, 2022
Shilling Coinbase
Cramer “shilled” Coinbase in the past. When the stock debuted on Nasdaq in April last year closing at $328, he stated that a fair price target for Coinbase ( COIN ) would be in the region of $600.
“This is all a scarcity, we don’t have any other way for mutual funds to be involved with crypto,” Cramer said during a discussion on “Squawk on the Street.” He recommended to buy the stock.
However, It’s been downhill ever since. Coinbase closed up 4% at $64 on Friday, and is down 80% since listing.
Who is Jim Cramer?
Jim Cramer is an American former hedge fund manager, stock market investor, author, and entrepreneur. The 67-year old is best known for hosting CNBC television’s “Mad Money”, a show that claims to “provide stock traders with all manner of investing advice.”
Cramer is seen as a so-called contrarian investor. He frequently goes against the tide, buying when everyone is selling. The thinking is that investors selling often do so in a panic, tending to overreact. This gives the contrarian investor a chance to buy stocks, or crypto, cheaply.
It worked for Cramer at some point. He made a $1 million profit when he bought tobacco firm Phillip Morris International as the share lost $10 billion in one day after an unfavorable court outcome, according to reports.
Alan Deutschman , the journalism professor and Silicon Valley correspondent for Fortune, has described Cramer’s investment style as “chameleon-like and erratic.” That’s because it could not be pinned down to a specific strategy.
Cramer has also shown interest in cryptocurrency. He bought a significant amount of bitcoin in 2020 when it traded for $12,000. He sold 50% of the cache when the price hit $64,000 the following year, and used the proceeds to “pay off a mortgage.”
“I will buy – like I usually do – as something comes down. I’ll get bigger and bigger and bigger,” said Cramer after he bought more bitcoin as it slipped to $17,000 in Dec. 2020. He proved his contrarian style.
With an estimated net worth of over $100 million, the TV host has often issued mixed signals regarding crypto. But he also recommended that investors put at least 5% of their portfolios in digital assets, preferably BTC and Ethereum, which he considers “legitimate”.
Cramer said recently Silicon Valley tech executives have started to consider the crypto industry a fraud, which benefited its promoters at the expense of retail investors. He followed this up with advice to “sell all speculative assets” like BTC, in part due to the Fed’s tightening monetary policy.
Cramer’s missed predictions
CNBC says Jim Cramer “plays with an open hand and wants to help investors invest smarter to build long-term wealth.” However, his forecasts on crypto markets have been anything but smart. People likely lost money following his tips.
In June 2021, the finance expert urged investors to be “patient” with bitcoin as markets went into a tailspin. Ten days later, Cramer could not take the decline anymore. He claimed BTC is “not going up because of structural reasons.”
“Sold all my Bitcoin. Don’t need it,” he told CNBC’s “Squawk Box”. In November of the same year, bitcoin reached an all-time high of $69,000. Earlier in the year, in March, Cramer boasted to have made lots of money from bitcoin as his investments in gold and stocks fell. He was bullish then.
More recently, Cramer made calls regarding BTC’s bottom – meaning the asset had reached a price beyond which it could not decline any further during a market cycle. He now claims crypto has no “real value” and will not hold its total market value above $1 trillion.
“Crypto really does seem to be imploding. Went from $3 trillion to $1 trillion. Why should it stop at $1 trillion? There’s no real value there,” he said.
This would be fine if he a) was a crypto skeptic all along b) ack that he was pushing it when it was going up and got call wrong. Instead he's a bandwagoner on steroids- last guy to praise stuff bf it collapses and last guy to trash it bf it rebounds. WHERE IS INVERSE CRAMER ETF? https://t.co/6tIMdNO1m6 — Eric Balchunas (@EricBalchunas) July 6, 2022
Following Cramer’s statements in July, markets rallied. July has been the best month for bitcoin so far this year. The top cryptocurrency closed the month with a gain of 17%, and Ethereum, its next closest competitor, soared by 55%.
As the price of bitcoin tanked to $17,500 in June, he warned that “a lot of younger people and people who borrowed money, they are going to be gone today if they are not careful.” Cramer did not intend for this to sound like a “joke”.
Madman in a suit excites crypto
But the veteran investor has lost much of the goodwill in crypto. He is often laughed off as the madman of Crypto Twitter. These predictions – and more – have turned Cramer into the ultimate villain, cannon fodder for memes.
His negative comments inspire excitement in cryptocurrency. Crypto trader Algod, famed for predicting the collapse of the Terra ecosystem and taking a $1 million bet on it, said recently that he was actively trading against Cramer.
Algod revealed he “officially doubled” a trading account he started with $50,000 just so he would trade against the stock market pundit. “Honestly mind blowing how wrong one man can be,” tweeted the self-proclaimed “semi-retired degen.”
Officially doubled the inverse @jimcramer account, for those who are not aware i started the account with 50k honestly mind blowing how wrong one man can be pic.twitter.com/mH3DhEdJFs — Algod
License.
