News - Jim Cramer bets against BTC: a good signal for Bitcoin?

By Sam Fröling

Jim Cramer bets against BTC: a good signal for Bitcoin?

Bitcoin (BTC)
Jim Cramer bets against BTC,: a good signal for Bitcoin?

Jim Cramer has bet against the cryptocurrency again. What does this mean for the BTC-course?

"You can't kill Bitcoin.", declared American TV personality Jim Cramer on Jan. 2. A day later, the cryptocurrency capitulated, falling about seven percent to $42,000. Yesterday, Jan. 8, the former hedge fund manager spoke out again: "I think Bitcoin has reached its peak." At the same time, BTC broke through the USD 47,000 mark - setting a new high for the year.

A sigh of relief for the BTC price?

For the Bitcoin community, one thing is clear: Cramer is always wrong, so Bitcoin must rise if the TV presenter is bearish. That's why X celebrates the 68-year-old's assessment.

Investors in the crypto market are now speculating on Cramer's varying opinions on Bitcoin. His recommendations are therefore seen as counter-indicators. This has a name: Inverse Cramer Strategy.

Does this strategy work?

Investing based on the opinion of a TV personality: not really a good idea. Yet this strategy has been partially successful in the past: anyone who invested $100 in early 2021 based on the Inverse Cramer Strategy would have about $132 in their wallet by the end of 2022.

This works because Cramer's predictions are often clearly misjudged. Three examples:

In November 2012 predicted the "Mad Money" presenter a sharp drop in the value of Netflix. Within the next six months, the stock's value rose 175 percent. In the same year, Cramer recommended selling HPE shares because of a "broken corporate culture." Nevertheless, within the following six months, the value rose 110 percent. In April 2015, he recommended Kohl's Corp shares. Six months later, the stock was down 41 percent.

Trading Bitcoin when Cramer speaks?

Incidentally, if you followed Cramer's trading recommendations from August 2021 and invested $1,000 in the stocks he selected, it would have resulted in an 83 percent loss in value. Thus, the Inverse Cramer Strategy is anything but reliable. Moreover, the entertainer may simply be enjoying the attention, memes and speculation surrounding his person.

So trading Bitcoin against Jim Cramer's assessment could fail. If you rely on the Inverse Cramer strategy, the price will rise in the coming weeks. Until Cramer disagrees again.

Also read: Samson Mow: How Bitcoin soars to one million dollars

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