Investors should withdraw some of their holdings in cryptocurrencies to avoid future losses, according to CNBC’s Jim Cramer.
Jim Cramer urges caution in the cryptocurrency market in the midst of the Evergrande saga. He also advised people sitting on the unrealized gains from their investments to take “something from the table” before losing it.
‘Dont let this become a loss’
American TV Personality Jim Cramer shared his stance on the recent decline of cryptocurrency and the ongoing crisis with one of China’s leading real estate companies – Evergrande. He believes the company’s problems will likely continue to hamper the digital asset market for the foreseeable future. Consequently, he urged other cryptoactive investors (like himself) to take some profits while it’s time:
“If you have cryptocurrency anyway and have big earnings, I recommend taking something off the table. I know crypto lovers never want to hear me say sell, but if you’ve had a big gain like me, well, I’m begging you: don’t let it become a loss. ”
Still, CNBC’s Mad Money recommended leaving some stakes in the China case “change your attitude towards the rescue of Evergrande”.
According to Cramer, another reason cryptocurrencies are such a risky investment instrument at the moment is their relationship with Tether. His concern is that many investors buy Bitcoin and Ether through the most widely used stablecoin, which has exposure to Chinese commercial paper.
As a multi-billion dollar company, Tether’s collapse could have a perverse impact on the entire digital asset market.
“If Tether collapses, well, it will destroy the entire crypto ecosystem.”
It is important to note, however, that Tether has recently denied assumptions that it holds any commercial paper or securities related to Evergrande.
Jim Cramer urges caution in the cryptocurrency market in the midst of the Evergrande saga. Should investors take advice?
It is important to note that Cramer’s cryptocurrency actions have been highly inconsistent, as time has shown. In 2018, when bitcoin dropped below $4,000, he criticized the asset, calling it “outlaw currency“.
However, when the BTC hit an all-time high of nearly $65,000 three years later, the American said he had invested in the asset and promised to collect his salary on it.
CNBC also doesn’t have the best track record in providing cryptocurrency forecasts. In late 2020, Brian Kelly – another TV media personality – warned that the price of bitcoin could undergo a short-term correction falling to $12,000. Instead, the value of the dollar continued to rise, with the BTC trading at nearly $30,000 by year-end.
Another example is the CNBC report on Ripple in 2018. The media advised investors to get involved with XRP, praising it as “one of the hottest new cryptocurrencies, and costs just over $2 per coin.”. What followed, however, was a quick and painful fall. A month later, the XRP was down 82 percent to $0.57 and in August it dropped further to $0.23.