- Jim Cramer, a popular TV personality and former hedge fund manager, praised cryptocurrencies like Bitcoin and Ethereum, recommending investors to add them to their portfolios.
- The internet fears the “inverse Cramer” phenomenon, suggesting that the cryptocurrencies he praised may experience a decline or volatility.
- Bitcoin has shown price volatility, dropping below $95K, while Ethereum has been steadily holding around $3,400 for now.
Jim Cramer, the well-known CNBC stock picker, recently praised bitcoin and ethereum. However, some investors are worried this could trigger the “inverse Cramer” phenomenon and hurt the cryptocurrencies. Let’s explore what’s going on.
Jim Cramer’s Comments on Bitcoin and Ethereum
On his show Mad Money, Cramer said he likes cryptocurrencies as a hedge against government deficits. He specifically called out bitcoin and ethereum as cryptocurrencies investors should consider adding to their portfolios.
Cramer drew comparisons between cryptocurrencies and gold, saying gold can be confiscated by governments but crypto can’t. His comments were seen as very bullish on the cryptocurrency asset class overall.
The “Inverse Cramer” Theory
However, Cramer’s praise immediately sparked fears of the so-called “inverse Cramer” phenomenon among crypto investors on social media.
The inverse Cramer theory suggests that investors should do the opposite of what Cramer recommends. The thinking is that Cramer’s stock picks tend to underperform and his endorsements are a contrarian indicator.
So now that Cramer has talked up bitcoin and ethereum, some investors believe that could be a bad omen and the cryptocurrencies may underperform.
Early Price Action in Bitcoin and Ethereum
In the day following Cramer’s comments, bitcoin dropped below $95,000 after having traded above that level earlier in the week. Ethereum is holding steady around $3,400 but dropped 0.6% over the last 24 hours.
It’s too early to say if the inverse Cramer theory will hold true. Bitcoin and ethereum had already pulled back from recent highs before Cramer’s comments. More time is needed to evaluate whether his praise will negatively impact the cryptocurrencies.
The Bottom Line
Jim Cramer’s bullish endorsement of bitcoin and ethereum has crypto investors on edge. The inverse Cramer phenomenon has led to selling pressure as investors worry the Mad Money host’s comments could be a contrary indicator. However, it remains to be seen whether bitcoin and ethereum will significantly underperform due to Cramer’s praise.
