Jim Cramer is fickle when it comes to stock recommendations. The same could be said for cryptocurrency.
What Happened: The CNBC host sounded the alarm on the crypto sector Monday after previously recommending viewers to invest. He labeled the events of the cryptocurrency sector as “Crypto Monday,” led by Celsius and others pausing trades and withdrawals on users’ accounts.
“I don’t want to make a joke of it. A lot of younger people and people who borrowed money, they are going to be gone today if they are not careful,” Cramer said.
Cramer added that he is hearing pessimistic views from his contacts in Silicon Valley, with some calling crypto “a con.”
Cramer mentioned large marketing campaigns from cryptocurrency platforms including an ad campaign from Crypto.com with Matt Damon as reasons why more people are speculating in the cryptocurrency sector.
“Here’s what happens in these situations. The people with a lot invested in crypto will come in and make a stand," he added, likening the sentiment to a medieval war drama. "It’s Braveheart.”
Cramer called the drop in the prices of cryptocurrencies like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) a “necessary cleansing of speculation.”
Why It’s Important: Many on social media were quick to point out that on April 28, Cramer was recommending people to buy Ethereum.
“I think Ethereum is terrific," he said. "I’m a believer.”
Cramer told viewers he thought Ethereum could get 35% to 40% higher, but instead the cryptocurrency is down over 50% since the episode.
“There are fortunes made in crypto,” Cramer said on June 8 saying he was a “believer” in cryptocurrency.
On Monday, Cramer said he pulled his money out of Ethereum and broke even on his original investment.
Cramer previously cautioned that investors should consider the sector as a speculative investment and make it less than 5% of their portfolio.
“Don’t put it in the Procter & Gamble class. It’s not Coca-Cola (NYSE:KO), it’s not Apple (NASDAQ:AAPL).”
Cramer said investors should never borrow money to invest in cryptocurrency.
Some on social media including Solana (CRYPTO: SOL) co-founder Anatoly Yakovenko even predicted Cramer to reverse his mind on cryptocurrency with prices falling.
“A major fund must also close and Cramer will utter a bearish crypto prose,” Yakovenko tweeted.
Dogecoin (CRYPTO: DOGE) co-creator Billy Markus hit back at Cramer saying: “Jim ya gotta shut up sometimes.”
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