Cramer says sell – is this the bottom for crypto?

When Cramer of CNBC tells his audience to sell, shouldn’t they be buying?

Cramer urges his viewers to sell

The eternal joke is that when you hear Jim Cramer of CNBC urging his audience to buy or to sell then this is the time to do the complete opposite.

In Monday’s video for CNBC, Cramer told his viewers that there was still time to sell their cryptocurrency holdings. He expanded on this by saying “it’s never too late to sell an awful position”.

“You can’t just beat yourself up and say, ‘hey, it’s too late to sell.’ The truth is, it’s never too late to sell an awful position, and that’s what you have if you own these so-called digital assets,”

It might appear that Cramer is giving some fairly sound advice. He is pointing at the Fed tightening going on and saying that investors shouldn’t be in speculative assets whilst this is happening.

Not too many people would disagree with this, given that in this kind of environment, the more speculative the asset, the more likely it is to take a bigger hit than safer assets such as gold for example.

Other factors to consider

However, there are always other factors to consider. Fed Chairman Powell is starting to signal that further interest rate rises may be less steep than they have been so far, perhaps getting the market ready for the inevitable pivot that could come at some time in 2023.

As some analysts are saying, a market rally nearly always comes before the Fed makes its pivot, and it usually plummets right afterwards. Crypto could be boosted by this, especially given that it has been the hardest hit asset class so far.

It might also be said that the worst time to sell an asset is when it is near its bottom. Cramer would probably argue that crypto will fall a lot further, and of course, he may be right. But if crypto led all asset classes into a bear market, wouldn’t it be more likely that it might lead them out?

From a technical perspective, the total crypto market cap does look as though it is making a double bottom, and if this is so, then Bitcoin might well have hit its own double bottom. 

Promising technologies

This isn’t to say that of the more than 20,000 cryptocurrencies, maybe 99% of them will go to zero. However, among them, there are extremely promising technologies that may one day completely revolutionise a monetary system that is sorely in need of it.

Cramer spoke on Monday about what happened to bad stocks during the dotcom collapse. But he didn’t spend any time talking about what happened to the good ones that ended up becoming the mainstay of stock markets from then on.  

When Mr Cramer tells his audience to sell he must certainly be doing so by listening to his inner conviction telling him that he is right. However, markets don’t usually follow the expected course. Trading in these uncertain times is extremely perilous. Take much care.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.