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CNBC’s Jim Cramer Calls Bitcoin “Monopoly Money”

Last Updated March 4, 2021 5:02 PM
Lester Coleman
Last Updated March 4, 2021 5:02 PM

CNBC on Wednesday ran a segment claiming bitcoin is a bubble. The segment began showing CNBC “Mad Money” host Jim Cramer calling bitcoin “monopoly money” and saying that investing in it is “pure gambling.” Cramer said gamblers would be better off in Las Vegas than investing in bitcoin.

Bitcoin’s Place In History’s Bubble

After running clips of financial experts denigrating bitcoin, the CNBC segment compared bitcoin to the tulip bubble of the 1600s, the Mississippi bubble, the South Sea bubble, the tech bubble, the financial crisis, Japanese stocks, the Great Depression and the S&P 500 today. The chart compared the multiple starting prices for each of these bubbles, then noted bitcoin’s multiple is approaching that of the greatest bubble in history, the tulip bubble.

The segment cited the following signs of a bubble that bitcoin exhibits: rapid pace movements, a lot of speculation without a lot of understanding of the risks, and a lot of non-traditional investors jumping in.

The narrator compared the bitcoin futures being launched by Cboe, the CME Group and Nasdaq to a move the Dutch made prior to the tulip bubble crash.

Also read: CNBC Mad Money host Cramer joins the ‘bubble’ brigade

‘Unexplainable Highs’

“For every asset bubble, it’s the same story; otherwise level-headed people drive prices for a certain asset to unexplainable highs, whether that’s the price of beanie babies, stocks, houses, or perhaps cryptocurrency,” the narrator stated.

Bitcoin, since its inception, has increased almost 50-fold, the segment noted. If it maintains that growth rate, it will eclipse the U.S. economy in a few years. Where other assets yield returns of some sort, bitcoin has no intrinsic value, and generates no income besides an expectation of further price increases, the narrator said.

“It’s valuable because people think it’s valuable.”

“Bitcoin has gone parabolic, so that usually does not end well,” an expert named Cashin stated. Bitcoin’s price has gone “parabolic,” and such bubbles don’t last, the segment concluded.

Featured image from Shutterstock.