CNBC’s Jim Cramer told investors to ditch cryptocurrency investments in a dire segment following FTX’s disastrous bankruptcy.
A frequent critic of the cryptocurrency sector, Cramer likened the current conditions in the cryptocurrency sector to what investors experienced during the dotcom bubble burst in 2000. The polarizing CNBC anchor said investors should cut their losses amid the upheaval in digital currencies.
“You can’t beat yourself up and say, ‘Hey, it’s too late to sell.’ The truth is, it’s never too late to sell a bad position, and if you own these digital assets, you have something,” Cramer said Monday. On CNBC’s “Mad Money.”
FTX’s $32 billion bankruptcy filing last month has raised eyebrows in the industry, sparking fears of a “contagion” effect on other firms. FTX’s creditors are still owed billions of dollars, with no resolution in sight.
Meanwhile, bitcoin has fallen 66 percent to $16,987 in the past 12 months as central bank tightening efforts and fears of a recession prompted investors to shed their riskier assets in favor of safer bets.
Cramer added that “marginal” digital currencies such as Dogecoin, XRP, Cardano and Polygon could fall to “zero” in the coming months, and he blasted the inflated valuations in the sector.
“Tether, a so-called stablecoin that is supposed to be pegged to the dollar, still has a market cap of $65 billion,” Cramer said.
“There’s still an entire industry of crypto boosters trying desperately to keep all of this in the air — not unlike what happened to bad stocks during the dotcom crash,” he added.
Kramer has been an outspoken critic of FTX and its disgraced founder Sam Bankman-Fried in recent days. Last week, Cramer called Bankman-Fried a “complete fraud” and called the 30-year-old former billionaire “disgusting” for his handling of the FTX collapse.
Cramer’s investment advice is often derided on social media—critics routinely claim his bets are “short.”
In August, Kramer fell out with the Financial Times’ Alphaville blog. The publication joked that Cramer’s call that inflation peaked in July “makes us worry that it didn’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 counterintuitive indicator for our readers. Sorry for the mistake. Our goal was not to give any credence to Kramer’s opinion,” the newspaper quipped at the time.
In October, an emotional Cramer apologized for urging viewers to buy Meta stock — only for the company’s stock to fall to a six-year low.