key takeaways
- Jim Cramer suggested in CNBC’s Squawk Box on Tuesday that the cryptocurrency space “has no real value” and that further losses could occur.
- The former hedge fund manager pointed to the recent wave of crypto firms suffering from liquidity issues as he slammed the space.
- Cramer’s comments come months after he said that investors could “easily” secure returns of 35 to 40% by investing in Ethereum. He had also earlier announced that he had bought into the property.
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Cramer memorably said in April that he was a “believer” in Ethereum and suggested that investors could “easily” give banks a 40% return on the asset. At the time it was trading at around $3,000.
Jim Cramer Changes Tune on Crypto
Now that crypto prices have plummeted, Jim Cramer has indicated that he is not a fan of the emerging asset class.
“Crypto appears to be really cracked. Went from $3 trillion to $1 trillion. Why should it stop at $1 trillion? There’s no real value there,” says @JimCramer Feather #crypto, “What an awesome asset. NFT sold you. Ready.” pic.twitter.com/09e5ST8q0N
— Squawk Box (@SquawkCNBC) 5 July 2022
to speak on CNBCK Squawk Box, a former hedge fund manager, on Tuesday discussed the months-long downward trend in global markets, remarking that he was most interested in the current state of the cryptocurrency market. “Crypto really starts to explode. When it rises from $3 trillion to $1 trillion, why should it stop at $1 trillion? There’s no real value there,” he said in the global crypto market capitalization over the past eight months. Said with respect to the sharp fall, before commenting on the increasing number of companies facing turmoil due to the recent market downturn. “How Many Companies Can Sam Bankman-Fried Save?” He added.
Last week, the US arm of Bankman-Fried’s FTX exchange struck a deal with BlockFi to acquire the firm for up to $240 million amid the lender’s bankruptcy issues. Bankman-Fried-founded trading firm, Alameda Research, also stepped in to bail out Voyager Digital after the firm announced it was dealing with its liquidity crisis. The spillover effects of Terra’s recent explosion and Three Arrows Capital’s explosion have wreaked havoc across the industry and contributed to the recent market slump. After several firms disclosed their problems, Bankman-Fried reported Forbes That he thinks many more exchanges may be “secretly bankrupt”.
Cramer’s Previous Comments on Ethereum
Cramer’s latest comments will come as a surprise to some, given his past views on crypto. In April, he declared On Squawk Box he thought Ethereum was “awful” and that he was “a believer”. He then added that investors “can get in easily”. [returns of] 35 or 40%.” ETH has since dropped from $2,970 to $1,100, meaning anyone who invested while commenting would have lost over 60%.
Cramer also stated in June 2021 that he prefers Ethereum to Bitcoin because “people use it”. [ETH] to be able to buy things,” revealing that he had bought ETH and would continue to add to his holdings. At the time it was trading at just over $2,000. Before diving into Ethereum, he told investors recommended allocating 5% of his portfolio to bitcoin as it was leading the crypto bull run in early 2021.
ETH, along with the rest of the crypto market and other risk assets, has a rocky 2022, down nearly 70% year-on-year. Notably, major tech stocks such as Meta, Netflix and PayPal have posted losses of over 50% amid rising Federal Reserve interest rates and rising fears of a global recession.
While Cramer pointed to the recent crypto firm blow-up and the NFT market as an explanation for why the space has no value, he also criticized any recent innovations such as DeFi trading, stablecoins, Layer 2 rollups or the value of NFT art. not mentioned. In his own comments.
During market downturns, crypto believers have been known to call each other “HODL” and “buy dips”, mantras that advocate holding and accumulating more coins when the charts turn red. Despite his previous comments, it appears that Cramer is no longer one of them.
Disclosure: At the time of writing, the author of this article owns ETH and several other cryptocurrencies.
