Jim Cramer, popular host of CNBC’s Mad Money show brags that he has sold off all his bitcoins amid the sharp plunge in bitcoin and other cryptocurrency prices that continued in the new week from the massive weekend selloffs.
While speaking during an interview on Monday, June 21 with CNBC’s Squawk Box on the Street, Cramer delved into issues such as China’s recent regulatory crackdown and some “structural reasons” the Bitcoin network currently experiences. Cramer shared that “bitcoin price is not going up because of structural reasons.”
With the Chinese government ramping up a regulatory crackdown on Bitcoin mining and cryptocurrency within its shores, Cramer asserted that China is not about letting its oversight hook on Bitcoin saying it [China] categorises BTC as a “direct threat” to its monetary control capacity within its economy. Cramer said Bitcoin was “a system that’s outside of their [Chinese government’s] control.”
Cramer’s insights on the recent spate of crypto market tumble may have been largely connected with the negative market sentiments that ensued after China’s apex bank, The People’s Bank of China (PBoC), told the country’s major financial institutions to stop facilitating cryptocurrency transactions in a move that increased negative sentiment in the markets. The second-largest economy after the United States also gave a cease and desist order to mining operations within its borders, sending Bitcoin’s hash rate tumbling to an eight-month low as mining operations either shut down or moved offshore.
On the sharp drop in hash rate for the Bitcoin network, Cramer was of the opinion that the drop should normally have a positive impact on bitcoin price and not what the market saw.
"Instead of thinking that bitcoin should go up if it is outlawed or if it is made tougher to be mined, Bitcoin goes down as if people are saying 'I've got to redeem’ — when you limit mining, it should obviously go up unless there's a worldwide redemption."
Shifting focus on the US economy, Jim Cramer shared that regulators could tighten their noose on crypto-related activities especially with the recent uptick in ransomware attacks. The most recent being the Colonial Pipeline that resulted in energy shortages on the East Coast, a total of $4.4 million was paid to the hackers which the FBI and the Justice Department however recovered.
“The Justice Department and the FBI and the Federal Reserve and Treasury could coalesce and say: 'OK guys, if you pay ransomware, we're going to go after you.’"
And touching on Tether, Cramer thinks it’s the structural “weak link” of the crypto economy judging by how integrated Tether has become with major cryptocurrency exchanges and even DeFi activities. With the unending controversy that surrounds the stable coin issuer, Cramer said:
“They have not really told us what kind of commercial paper that backs them, and yet they are one of the largest buyers, and yet I can't find anyone, any desk that does business with them,”
Bitcoin and other cryptocurrencies have continued their downward spiral with BTC trading at $31,474 and $589 billion market cap losing above 22 percent of its value within a week according to data from Coinmarketcap. Overall, the total market cap for crypto currently sits around $1.26 trillion, representing an almost 9 percent decrease within the last 24 hours.