CNBC personality Jim Cramer told investors to dump their cryptocurrency investments during a scathing segment in the wake of FTX’s catastrophic bankruptcy.
Cramer, a frequent critic of the cryptocurrency sector, likened current conditions within the cryptocurrency sector to those investors experienced when the dotcom bubble burst in 2000. The polarizing CNBC fixture said investors should cut their losses during a period of upheaval in digital currencies.
“You can’t just beat yourself up and say, ‘hey, it’s too late to sell.’ The truth is, it’s never too late to sell an awful position, and that’s what you have if you own these so-called digital assets,” Cramer said Monday on CNBC’s “Mad Money.”
FTX’s collapse from a $32 billion valuation into bankruptcy last month upended the fledging sector and sparked fears of a “contagion” effect on other firms. FTX creditors are still owed billions of dollars, with no resolution in sight.
Meanwhile, the price of bitcoin has plunged 66% to $16,987 over the last 12 months as central bank policy tightening efforts and recession fears prompt investors to dump their riskier assets in favor of safer bets.
Cramer added that “marginal” digital currencies, such as Dogecoin, XRP, Cardano and Polygon, could be “headed to zero” in the months ahead – and blasted what he described as inflated valuations within the sector.
“Tether, a so-called stablecoin that’s supposed to be kinda-sorta pegged to the dollar, still has a $65 billion market cap,” Cramer said.
“There’s still a whole industry of crypto boosters trying desperately to keep all of these things up in the air — not too different from what happened with bad stocks during the dotcom collapse,” he added.
Cramer has been an outspoken critic of FTX and its disgraced founder Sam Bankman-Fried in recent days. Last week, Cramer blasted Bankman-Fried as a “total con artist” and called the 30-year-old former billionaire “disgusting” over his handling of FTX’s collapse.
Cramer’s investment advice is frequently derided on social media – with critics regularly claiming they “short” his bets.
In August, Cramer got embroiled in a feud with the Financial Times’ “Alphaville” blog. The publication had joked that Cramer’s call that inflation had peaked in July “leads us to worry that it hasn’t.”
The FT later mockingly “apologized” to Cramer for the joke.
“In a previous Alphaville post we may have implied that Jim Cramer’s peak-inflation call was a reverse indicator for our readers. We regret the error. It was not our intention to give Cramer’s opinions any credence whatsoever,” the outlet quipped at the time.
In October, an emotional Cramer apologized for pushing viewers to buy shares of Meta – only for the company’s stock to plunge to its lowest level in six years.