Jim Cramer is a CNBC host and a market commentator. He has once again made headlines by admitting that he was wrong about Bitcoin. Cramer has been known for his controversial views and fluctuating relationship to cryptocurrencies. He tacitly admitted that he had made a mistake about the world's most popular digital asset.
Robin Brooks, the chief economist of the Institute of International Finance, has also ignited controversy by describing Bitcoin as "a pointless asset." His provocative statement attributes Bitcoin’s market behavior to Federal Reserve policies rather than its intrinsic value.
Jim Cramer admits to making a mistake in calling for a bearish Bitcoin forecast too early.
Cramer made the revelation during a segment of his CNBC Mad Money Show on November 22 when he answered a caller’s question about investing in CleanSpark - a Bitcoin mining firm. Cramer's surprising change of heart was revealed when he said, "Look, I think you should buy Bitcoin if Bitcoin is your thing." This has always been the case. "I liked it for a time, and thought that money was made. But I was too early."
Cramer’s change of heart on Bitcoin was a major departure from the advice he gave a year ago. Cramer encouraged investors to sell all of their cryptocurrency holdings on Dec. 5 when Bitcoin traded at $17,150. Cramer stated emphatically that "it's never too late to get out of a bad position." Since that call, Bitcoin has seen a stunning resurgence. Its price is up 118%.
Cramer admitted that his judgment of Bitcoin was premature, but he noted that, despite his past mistakes, he has managed to make a significant profit from his investments in cryptocurrency. Cramer's ability to profit off the volatile cryptocurrency market and the juxtaposition of his contradictory statements has made him a lightning rod of criticism and entertainment in the investing community.
Market participants have taken note of Cramer’s inconsistent and unpredictable views on cryptocurrency. In the last few years, Cramer's comments have been the subject of many online memes. Many traders and investors are jokingly highlighting the fact that he is prone to making wrong calls at critical moments.
In August 2022, a crypto-trader claimed that he had doubled his portfolio by doing the exact opposite of what Cramer suggested. This sarcastic strategy was highly profitable during the subsequent Bitcoin bull run. The trader earned a windfall.
Cramer has influenced the market again in October 2022, when an investment fund applied for an "inverse Cramer ETF". This unique financial product was designed to produce returns that were the opposite, before fees or expenses, of the results of the investments recommended by TV personality Jim Cramer. The filing attracted a lot of attention because it reflected the fact that Cramer's advice on investing is controversial.
Economist Robin Brooks Labels Bitcoin as a "Pointless Amount," Citing Federal Reserve Influence
Robin Brooks (chief economist of the Institute of International Finance, IIF) has ignited debate with a stunning critique of Bitcoin. He called the world's most popular cryptocurrency "a pointless asset". Brooks attributes Bitcoin’s market fluctuations primarily to Federal Reserve policy, rather than its intrinsic worth. This controversial statement was made as Bitcoin surged to a new record high of $38,437 at the Bitstamp Exchange, its highest level since may 2022. The rally was fueled by Binance's legal settlement and the anticipation of "spot Bitcoin" exchange-traded fund (ETF) ETFs.
Bitcoin: A Speculative Asset or a Currency?
Brooks' claim that Bitcoin behaves "like just another futures contract with the Fed" suggests that the cryptocurrency’s value and market behaviour are largely influenced by Federal Reserve monetary policy, as opposed to being a result of its intrinsic merits. This perspective challenges the widely-held view that Bitcoin is a decentralized, independent digital asset operating outside of the realm of traditional institutions.
The economist believes that investors would be better off betting on Federal Reserve's monetary policies directly through futures contracts. Brooks believes that Bitcoin's price fluctuation is a reflection of economic sentiments and policies, not indicative of its value.
Brooks' past criticisms of Bitcoin
Robin Brooks, a frequent critic of Bitcoin's perceived independency on social media, has often highlighted its correlation to the Federal Reserve's rate policies. This view is supported by historical data that shows the price of Bitcoin usually responds negatively when the Fed adopts a hawkish outlook while it rises in response to an optimistic outlook.
Brooks also dismissed Bitcoin's potential as a store of value and a way to diversify investment portfolios. He publicly labeled Bitcoin as a "bubble" asset, suggesting that it is highly susceptible to changes in macroeconomic factors and monetary policy.
Although Brooks' criticism has caused controversy in the cryptocurrency community it is important to acknowledge that Bitcoin has always been at the center of debate regarding its relationship with government policies and broader financial markets. Some people believe that Bitcoin is a valuable asset because of its resilience and ability to act as a hedge for traditional financial systems. Others, however, share Brooks' concerns about the vulnerability of Bitcoin to external influences.
Bitcoin will continue to evolve, and opinions about its true value and nature will be diverse as it integrates into global financial systems. The discussion that has been sparked by Robin Brooks’ assertion is a reminder of the fact that the cryptocurrency market landscape continues to evolve, and perspectives on the role it plays in the financial ecosystem continue to shape its narrative.
Price Overview
Chart for BTC/USDT daily (Source: TradingView).
BTC broke above the $38K key mark in yesterday's session. But bears quickly seized on this strong movement. The market leader had to close its daily candle at $37.713.57. TradingView data shows that the value of the cryptocurrency has increased by 0.25% in the last 24 hours. It was $37,806.99 as at the time of press.
BTC's chart shows that buyers are growing more powerful. This could be the catalyst for BTC to surpass the $38K barrier again in the next 48-hours. The Relative Strength Index indicator (RSI), which is a measure of relative strength, indicated this. As of the time of publication, the RSI was moving towards the RSI Simple Moving Average line. Traders usually identify the narrowing of the gap between the RSI SMA and RSI SMA as bullish if the RSI SMA is below the RSI SMA.
If these lines cross, this could indicate that buyers are back on BTC charts and may be trying to push the price of the top cryptocurrency up. If this bullish hypothesis is confirmed, BTC may surpass the $38K mark and continue climbing to the next level at $40K over the course of a few days.
A slight pullback may occur if BTC fails to close its daily candle at or above $38K in the next 48-hours. The cryptocurrency value may drop to $36,880, which is the immediate support.
