Here’s why Jim Cramer’s ‘surprising’ Bitcoin price prediction is wrong
- Jim Cramer recently said that Bitcoin was a technology marvel that was difficult to kill.
- He said that as the coin was in a strong uptrend ahead of spot ETF approvals.
- He has now changed his tune about the coin citing demand issues.
Jim Cramer, the popular CNBC host, has changed his tune on Bitcoin as its price remains under intense pressure. It has dropped by over 17% from its highest level this month and is nearing a bear market. This decline has also led to more losses in the altcoin market, with popular tokens like Dogecoin, Solana, and Avalanche crashing.
Jim Cramer now believes that Bitcoin price has more downside to go in the coming weeks. In a statement, he argued that there will be no more new money coming in Bitcoin any time soon. In a separate tweet, he warned that Bitcoin was tough to own.
Cramer’s change of tune is surprising because it was just a few days ago that he made a bullish view of the coin. He called it a technological marvel that can’t be killed, pointing out that Charlie Munger was blind to this fact.
Jim Cramer is a legend of making wrong calls, which explains why some people will often buy the dip now that he has come against it. For example, in 2009, Jim Cramer went on air and advocated for Bear Sterns before the company collapsed. Similarly, in 2023, he advocated for First National Bank a few months before it collapsed.
Analysts note that the current Bitcoin sell-off was easy to predict and that it will likely be brief. For one, as I wrote earlier today, the sell-off is mostly investors are now selling the news since the SEC approved spot Bitcoin ETFs last week. It is not uncommon for financial assets to pull back after a major event.
Further, in most cases, Bitcoin tends to retreat as it hits a key resistance level. For example, as shown above, Bitcoin retreated by 20% between April and June 2023 after it rose to $30,000. It then staged a rally to $49,000 this year. As such, in my view, it makes sense that it pulled back as it approached $50,000.
Most importantly, Bitcoin has several catalysts ahead, including the ongoing risk-on sentiment, upcoming halving, and potential rate cut by the Federal Reserve. Also, institutional demand is expected to rise gradually as supply remains scarce.
Finally, most experienced investors know that you cannot judge an asset’s price performance for what it does in a few weeks. For example, while the Nasdaq 100 index has jumped to a record high, it was down by 11% between July 19th and October 26th.
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