Cramer's Bitcoin U-turn
Cramer hasn’t always been pro-Bitcoin. After the crypto market crash and the dramatic downfall of the cryptocurrency exchange FTX in November 2022, Cramer shared damning commentary on CNBC on the value of digital assets — and the intelligence of those who own them.
“I sold all my crypto … I would not touch crypto in a million years because I wouldn’t trust the deposit bank,” he said. “If you have your money in [crypto], I’m not calling you an idiot; I’m just saying you have blind faith.”
But Cramer has since taken a dramatic U-turn on that position thanks to Bitcoin’s “remarkable comeback” in 2023 and now advises his followers: “If you like Bitcoin, just buy Bitcoin.”
Part of the reason for Bitcoin’s recent rally has been investor excitement about the prospect of spot Bitcoin ETFs, which could potentially result in huge growth in the market.
While the U.S. Securities and Exchange Commission (SEC) has so far blocked attempts to launch them — arguing the market is vulnerable to manipulation — SEC chair Gary Gensler told CNBC in December that regulators are “taking a new look” at spot Bitcoin ETFs.
Regulators are expected to make an announcement regarding these ETFs in early January. If they once again block development, it could potentially pause the Bitcoin rally.
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Munger's Bitcoin bashing
Munger — who died Nov. 28, 34 days shy of his 100th birthday — was a world-renowned investor who worked tirelessly as Warren Buffett’s right-hand man at Berkshire Hathaway.
Not one to mince words, Munger took several broad swipes at cryptocurrencies in recent years. In February, he penned an op-ed for the Wall Street Journal wherein he described crypto as “a gambling contract with a nearly 100% edge for the house” and called for an outright ban on cryptocurrency.
At the Daily Journal’s 2023 annual shareholder meeting, shortly after the op-ed was published, Munger said of crypto: “It’s massively stupid. It’s very dangerous. The governments were totally wrong to permit it. I’m not proud of my country for allowing this crap. It's worthless, it's no good, it's crazy, it'll do nothing but harm.”
He later trashed Bitcoin, specifically, in a keynote address at Zoom’s Zoomtopia 2023 conference in October, where he said: “Don’t get me started on Bitcoins. Most of those investments are going to zero.”
Although investments have yet to plunge to zero as Munger suggested may happen, if anything, Bitcoin’s recent rally has shown crypto to be an incredibly volatile play.
Munger was not known to place risky bets. Instead, he made his billions through value investing and buying and holding high-quality stocks to reap the benefits of compound interest.
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