Former hedge fund manager Jim Cramer believes Bitcoin is most likely dead. Cramer’s pronouncement comes at a difficult period for Bitcoin and the cryptocurrency market. The top-ranked virtual currency has flirted with the $6,000 mark, dropping below that price level several times in the past few days.
‘The Tide Has Turned’
Speaking during his show on Tuesday, the CNBC host said:
I think the tide has turned against it. I’m not saying its time has passed, but there is a notion that the sun seems to be setting.
Bitcoin bashing has resumed in full swing since the start of August as the BTC price 00 has experienced several sharp declines. Since the beginning of the year, BTC has dropped almost 60 percent.
The reticence of the U.S. SEC to approve a BTC ETF seems to have deflated retail investor confidence in the market. Even the emergence of some positive developments in the institutional front, as well as the currency crisis in Turkey, has failed to spark a spike in cryptocurrency prices.
However, Cramer’s setting sun analogy is demonstrably inaccurate given the nascent nature of the market. All signs point to a Bitcoin ETF likely being approved in early 2019. Many experts agree that critical infrastructure such as custody and liquidity has to be solidified before an SEC-approved ETF can emerge.
Already, there have been some exciting developments on the custody front from cryptocurrency companies like Coinbase. Recently, Goldman Sachs revealed that they too were considering entering the cryptocurrency custodial space.
Bitcoin is the Outlaw’s Currency
Not done with the setting sun analogy, Cramer referenced comments attributed to CyberArk CEO, Udi Mokady. According to Cramer:
This thing [Bitcoin] has really become like an outlaw currency.
Cramer once more brings up the outmoded assertion that BTC is the native currency of terrorists, drug dealers, money launderers and the like. In 2017, Cramer also opined that the only reason why Bitcoin would reach the $1 million price was on the back of extortion and blackmail. According to him, people, banks, and governments alike would in the future, require BTC to pay off blackmailers and ransomware attackers.
While the scourge of cryptocurrency ransomware isn’t something to be cast aside, the amount of money involved doesn’t hold a candle to the global Bitcoin trade. The idea that an obscure pseudo-market like that could impact the cryptocurrency industry is laughable at best.
Earlier in the year, a report showed cryptocurrency accounted for a negligible percentage of money laundering cases. More recently, the U.S. Drug Enforcement Agency (DEA) revealed that only about ten percent of BTC transactions were for illegal activity. According to Special Agent Lilita Infante, a member of the DEA’s Cyber Investigative Task Force, speculative investments comprise the lion’s share of BTC transaction volume.
As a parting shot, remember that Cramer is the same person who boldly proclaimed in 2008 that Bear Stearns was fine, trading at $62 in 2008. Well, we all know what happened less than a week later. For those who don’t, JPMorgan bought the company for a paltry $2 per share six days later.
Do you agree with Cramer’s position that Bitcoin is dead? Keep the conversation going in the comment section below.
Images courtesy of CoinMarketCap.com, Shutterstock, cnbc.com
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