Bitcoin offices in Istanbul, Turkey, on May 11, 2022.
Umit Turhan Coskun/NurPhoto via Getty Images
CNBC’s Jim Cramer called bitcoin‘s collapse Crypto Monday, in what he fears is Day 1 of a reckoning in the digital currency market.
In speaking off-air to tech executives during his trip to San Francisco last week, Cramer said he got the sense that Silicon Valley thinks crypto is a con and its promoters have taken an awful lot of money from unsuspecting investors. That revelation was just one of the 15 things Cramer said he learned from spending time out West for the first time since the beginning of the Covid pandemic.
Cramer, who has put some of his own money in crypto in recent years, said he was able to get his money out of ether, the world’s second-largest crypto, which was tanking 20%. He said he basically broke even on his original investment.
Monday’s 17% plunge sent bitcoin under $23,000. That’s a 66% nosedive from its all-time high in November. The world’s largest cryptocurrency is no stranger to so-called crypto winters that have given way to eventual recoveries back to records. However, Cramer questioned whether who he called “bitco maniacs” are going to come readily into the crypto market to stanch the bleeding as they have in the past.
The pain is widespread.
- Crypto exchange Coinbase lost 13% on Monday.
- A rival crypto exchange, Binance, temporarily paused bitcoin withdrawals “due to a stuck transaction causing a backlog.”
- Crypto lender Celsius paused all account withdrawals and transfers, citing “extreme market conditions.”
- MicroStrategy, led by bitcoin evangelist Michael Saylor whose company is heavily invested in the digital coin, lost 26%.
The plunge in bitcoin and the crypto market at large are not systemic risks but rather a “necessary cleansing of speculation,” Cramer said. His Charitable Trust, which is the portfolio for CNBC’s Investing Club, has no exposure to crypto or stocks related to it.
(See here for a full list of the stocks in Jim Cramer’s Charitable Trust.)
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