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Cramer’s Bitcoin Betrayal: Regrets Selling Crypto as Prices Surges in “Cramer Effect”

Last Updated November 24, 2023 1:06 PM
Teuta Franjkovic
Last Updated November 24, 2023 1:06 PM

Key Takeaways

  • Jim Cramer’s flip-flopping on crypto recommendations has led to the development of the “Inverse Cramer Signal.”
  • Cramer’s recent misjudgment of Bitcoin has further fueled the “Cramer Effect.”
  • The “Cramer Effect” is not always reliable, but it has proven to be profitable in some cases.

The Inverse Cramer Signal, a phenomenon frequently utilized, involves buying stocks that TV host Jim Cramer has suggested are likely to decline.

This time, Cramer put all his cons on Bitcoin – and was wrong – again. However, he did admit his premonitions were a little bit “premature.”

Jim Cramer Admits Misjudgment of Bitcoin

Markets commentator Jim Cramer admitted  to misjudging Bitcoin’s trajectory, acknowledging that his previous advice to sell the cryptocurrency was premature. In a recent CNBC Mad Money segment , Cramer responded to a caller’s query about investing in Bitcoin miner CleanSpark by encouraging those optimistic about Bitcoin to increase their holdings.

“Look, if you like Bitcoin, buy Bitcoin. That has always been my view. And for a while, I liked it, and I decided that money had been made, but I was premature,” Cramer said .

Cramer further mentioned that although his past calls on Bitcoin may not have been flawless, he emphasized that he had still generated significant profits from his investment in the cryptocurrency.

On December 5, 2022, when Bitcoin was priced at $17,150, Jim Cramer advised investors to liquidate all their crypto holdings . He argued that it was “never too late to sell an awful position.” Since then, Bitcoin has surged by 118% , with the current BTC price at $37,390.

‘Cramer Effect’ Gains Traction

Cramer’s predictions, coupled with his fluctuating relationship with crypto, have turned into a well-known meme within investment circles in recent years. Many highlight his seemingly inconsistent ability to make accurate calls during critical moments.

In August 2022, a crypto trader claimed  to have doubled the size of their portfolio by simply trading in the opposite direction of Cramer’s recommendations.

Two months later, on October 6, an investment fund filed for an “inverse Cramer ETF,”  a financial instrument designed to yield results opposite to the investments recommended by Jim Cramer, before fees and expenses.

Cramer’s track record with crypto has led many investors to believe that the opposite of his recommendations may be more profitable. This phenomenon has been dubbed the “Cramer Effect.

Cramer's tweets

While the “Cramer Effect” is not always reliable, it has proven to be profitable in some cases. Investors who are considering trading crypto may want to keep an eye on Cramer’s recommendations, but they should also be aware of the potential for the “Cramer Effect” to work against them.

Cramer’s Cryptic Conundrum: A History of Flip-Flopping on Crypto

Cramer’s fluctuating relationship with crypto began in 2017 when he called Bitcoin a “bubble” and warned investors to stay away from it. However, he later changed his tune and began recommending crypto to his viewers.

In 2021, Cramer once again warned investors about crypto, saying that it was “too late” to get in. However, he once again reversed his position in 2022, saying that crypto was a “buy.”

Cramer’s inconsistent recommendations have led to confusion among investors. Many are unsure whether to trust his advice, especially when it comes to crypto.

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