How many times has Jim Cramer of Mad Money failed to time crypto markets?
It has been said that “not all investors have the same investment style.” But Jim Cramer, with his contrarian strategy, no doubt made a lot of people poor. Now he has become a meme for his consistency in making the wrong calls about the direction of the cryptocurrency markets.
It’s hard to know if the stock expert believed the talks he made regarding bitcoin over the years. Yet, many of those who listened to him probably ended up on the losing side of whatever investment they made.
In July, for example, Cramer warned of a possible investigation of the crypto exchange Coinbase by the US Securities and Exchange Commission. “Very bad news” for the firm, he said. Just one week later, Coinbase’s shares rose by up to 50%.
People got angry. But it wasn’t the first time it happened. It won’t be the last either. “Never take financial advice from Jim Cramer!” cried crypto podcaster Tony Edward on Twitter at the time.
Shilling Coinbase
Cramer “shilled” Coinbase in the past. When the stock debuted on the Nasdaq last April and closed at $328, he stated that a fair price target for Coinbase (COIN) would be in the $600 range.
“This is a scarcity, we have no other way for mutual funds to be involved in crypto,” Cramer said during a discussion on “Squawk on the Street.” He recommended buying the stock.
However, it’s been downhill ever since. Coinbase closed up 4% at $64 on Friday, and is down 80% since its IPO.
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’s “Mad Money,” a show that claims to “provide stock traders with all kinds of investment advice.”
Cramer is seen as a so-called contrarian investor. He often goes against the flow and buys when everyone else is selling. The idea is that investors who sell often do so in panic, and tend to overreact. This gives the contrarian investor a chance to buy stocks, or crypto, cheaply.
It worked for Cramer at one point. He made $1 million when he bought tobacco firm Phillip Morris International when the stock lost $10 billion in one day following an unfavorable court ruling, 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 couldn’t 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 was trading at $12,000. He sold 50% of the cache when the price reached $64,000 the following year, using the proceeds to “pay off a mortgage.”
“I will buy – as I usually do – as something falls. I’m getting bigger and bigger and bigger,” Cramer said after he bought more bitcoin when it fell to $17,000 in December 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 investors put at least 5% of their portfolios in digital assets, preferably BTC and Ethereum, which he considers “legitimate”.
Cramer recently said that tech leaders in Silicon Valley have come to view the crypto industry as a fraud, benefiting 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 the crypto markets have been anything but smart. People probably lost money following his tips.
In June 2021, the financial expert urged investors to be “patient” with bitcoin as markets rallied. Ten days later, Cramer couldn’t take the decline any longer. He claimed that BTC “doesn’t go up because of structural reasons.”
“Sold all my Bitcoin. Don’t need it,” he told CNBC’s “Squawk Box.” In November of that year, bitcoin reached an all-time high of $69,000. Earlier in the year, in March, Cramer boasted of making a lot of money from bitcoin when his investments in gold and stocks fell. He was bullish then.
Recently, Cramer made the call regarding BTC’s bottom – meaning the asset had reached a price beyond which it could not drop further during a market cycle. He now claims crypto has no “real value” and will not keep its total market cap above $1 trillion.
“Crypto really seems 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.
After Cramer’s statements in July, the markets rose. July has been the best month for bitcoin so far this year. The top cryptocurrency ended the month with a 17% gain, and Ethereum, its next closest competitor, rose 55%.
When the price of bitcoin fell to $17,500 in June, he warned that “a lot of younger people and people who borrowed money, they’re going to be gone today if they’re not careful.” Cramer did not intend for this to sound like a “joke.”
Madman in suit excites crypto
But the veteran investor has lost much of his goodwill in crypto. He is often laughed at as the madman on Crypto Twitter. These predictions—and more—have made Cramer the ultimate villain, cannon fodder for memes.
His negative comments inspire excitement in cryptocurrency. Crypto trader Algod, known for predicting the collapse of the Terra ecosystem and betting $1 million on it, recently said he was actively trading against Cramer.
All good revealed he “officially doubled” a trading account he started with $50,000 just to trade against the stock expert. “Honestly, it’s amazing how wrong a man can be,” the self-proclaimed “semi-retired one” tweeted.
Cramer’s “erratic” financial advice has also led to the rise of “Inverse Cramer ETF,” a fictitious exchange-traded fund that tracks “the stock recommendations of Jim Cramer so you can do the opposite.” The account reached 107,000 followers on Twitter.
“I don’t care if a company is the next Amazon. If Jim Cramer recommends the stock, I will never buy,” accountant and financial news analyst Genevieve Roch-Decter tweeted after Cramer’s Coinbase miss in July.
After Cramer dubbed bitcoin’s collapse in June “Crypto Monday,” predicting the end of the crypto industry, Dogecoin (DOGE) co-creator Billy Markus responded sharply.
“Jim you need to shut up sometimes,” Markus black to a Cramer tweet.
For Be[In]Crypto’s Latest Bitcoin (BTC) Analysis, click here
Disclaimer
All information on our website is published in good faith and for general information purposes only. Any action the reader takes on the information contained on our website is strictly at their own risk.
