Over a short period, Bitcoin (BTC) experienced a remarkable increase in value, beginning at $27,900 on Sunday, April 9, and soaring to $30,450 by Tuesday. However, it is likely that a majority of CNBC’s “
Mad Money” host, Jim Cramer’s viewers, did not capitalize on the cryptocurrency’s impressive 23% gain. On March 14, Cramer advised his audience to avoid Bitcoin, raising the possibility that they missed out on the opportunity to make substantial profits from the digital currency’s surge.
Jim Cramer’s controversial advice on Bitcoin
In addition to warning his viewers to steer clear of Bitcoin, Cramer also encouraged them to sell any Bitcoin they owned. His rationale was based on suspicions of price manipulation by
Sam Bankman-Fried, a prominent figure in the cryptocurrency space. Despite not providing any concrete evidence to support these claims, Cramer suggested that the digital currency’s value might still be subject to manipulation. As a result, those who followed his advice and sold their Bitcoin holdings on March 14 may have missed out on a further 23% increase in the cryptocurrency’s value.
Jim Cramer’s argument, which attempts to link Bitcoin’s value to Sam Bankman-Fried, lacks credibility. Bankman-Fried, who is currently under house arrest and awaiting trial, is no longer in a position to manipulate the market. Furthermore, the assertion that FTX, the cryptocurrency exchange founded by Bankman-Fried, dictated Bitcoin’s price is not accurate. In fact, Bitcoin played a more significant role in influencing FTX’s value than the other way around.
Cramer’s dubious track record
Cramer’s stock-picking record has also been called into question. An in-depth analysis conducted by researchers at the Wharton School of the University of Pennsylvania revealed that over a 17-year period, Cramer’s stock picks generated an annualized return of a mere 4.08%, while the S&P 500 Index gained 7.07% during the same timeframe. This underperformance raises concerns about the reliability of his financial advice.
Those who heeded Cramer’s advice on Bitcoin in January, when he referred to the cryptocurrency as a “sham” while it traded at $20,688, would have missed out on a significant 46.8% increase in value. As such, it is essential for investors to conduct their research and approach financial advice with caution, even when it comes from high-profile experts like Jim Cramer. By critically evaluating the advice they receive and considering multiple perspectives, investors can make more informed decisions and potentially seize opportunities for substantial gains in the dynamic world of digital currencies.
