In summary
- Jim Cramer defended his stance on cryptocurrencies, despite his history of making wrong market predictions.
- Cramer said crypto deserves a place in portfolios, although without evidence that it protects against economic instability.
- His bullish comment on Bitcoin sent the market into a frenzy, but a 5% drop in the price of Bitcoin soon after denied it.
Jim Cramer, the animated host of CNBC’s “Mad Money,” has become something of an unwitting indicator of the crypto market, though not exactly in the way he probably expected.
On Tuesday, the commentator defended his stance on cryptocurrencies during another installment of his markets entertainment show, citing concerns about government spending and the deficit.
Last Friday, the stock enthusiast made a bullish call on Bitcoin, sending Crypto Twitter into a frenzy and causing observers to declare that the asset had peaked.
Two days later, the price of Bitcoin fell 5%, wiping nearly $5,000 off its value and pushing long liquidations to an 11-day high above $344 million.
“I have a bunch of clowns saying I called the top of crypto by recommending it,” Cramer said, adding that there were people who wanted to “drag me through the mud for something I did wrong 10, 15, 20 years ago.”
Cramer argued in favor of including cryptocurrencies in investment portfolios, despite acknowledging that there is no concrete evidence supporting them as a hedge against economic instability.
“While there’s no proof that crypto can protect you from anything, at least not yet, it’s a plausible story,” he said.
Cramer’s infamous history of making spectacularly wrong calls has made him a living meme in certain crypto circles, particularly among young traders.
His commentary has become so infamously contrary that some traders have developed a “Reverse Cramer” strategy, believing that doing the opposite of what he recommends is a path to profits.
The former hedge fund manager has had a roller coaster relationship with Bitcoin and other cryptocurrencies over the years: from bragging about buying a farm with Bitcoin profits to flipping between calling them worthless and saying no one can kill Bitcoin.
“I think Bitcoin, Ethereum and maybe even some other cryptocurrencies deserve a place in your portfolio,” Cramer said during Tuesday’s show.
Despite maintaining that cryptocurrencies deserve a place in his audience’s portfolio, Cramer’s endorsement came with a notable caveat: He could “change his tune” if the deficit is brought under control.
Edited by Sebastian Sinclair
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