CNBC’s “Mad Money” host Jim Cramer, once one of Bitcoin’s (BTC) most consistent detractors, has had a drastic change of heart. On Tuesday morning, Cramer praised Bitcoin as a “technological marvel” . He predicted the cryptocurrency is “here to stay”, marking a major pivot from his formerly dismissive views.
Cramer specifically cited Bitcoin’s recent ability to maintain prices above $45,000 and keep recovering from crashes as reasons why he now believes the asset has lasting power. He declared: “This thing, you can’t kill it.” His newly bullish perspective comes at a fortuitous time, with Bitcoin widely expected to benefit from the impending approval of a spot-traded ETF in the US.
The switch has been head-spinning for dedicated crypto watchers used to Cramer’s biting skepticism. As recently as October 2022, amidst the Sam Bankman-Fried trial, Cramer was advising audiences against buying Bitcoin, insisting “Mr. Bitcoin is about to go down big.” And last year, after China’s crypto mining crackdowns, he revealed he’d sold most of his personal Bitcoin holdings.
While Cramer says he recognizes Bitcoin’s resilience today, he continues injecting notes of caution. He pointed out many current Bitcoin holders are still short-term speculators, not true adherents. Approving a spot ETF could actually produce a “sell the news” effect, if it causes transient holders to cash out profits.
Nonetheless, for the cryptocurrency’s ever-growing tribe of backers, Cramer’s evolving views feel like a watershed moment. They see irony in the fact that Cramer’s blessing could be anything but beneficial, however. Due to a phenomenon crypto investors half-jokingly call the “reverse Cramer effect”. The concept even has its own ETF .
The “reverse Cramer effect” suggests that stocks and assets typically underperform or decline after receiving a glowing recommendation from Cramer. The thinking goes that, by the time Cramer gets excited about something, it’s often already overheated and due for profit-taking. Savvy contrarian investors also short or sell anything Cramer is newly bullish on, anticipating other investors’ enthusiasm will shortly fade.
As if to prove their point, Bitcoin’s price dropped dramatically just a day after his endorsement. On Wednesday, January 3, the cryptocurrency fell approximately 9% in just an hour, before rebounding 4%. The news was sparked by a report from Matrixport. The crypto services platform said a much-anticipated spot Bitcoin ETF may not be approved before April.
However, Senior Bloomberg ETF analyst, Eric Balchunas, who has been one of the leading voices on a spot Bitcoin ETF approval has raised doubts about the report. He said: “[You’re] basically saying multiple mainstream news reporters w multiple sources on inside of this also have it wrong… it overturns a LOT of good intel.”