CNBC's "Mad Money" host Jim Cramer sent ripples through cryptocurrency markets this week, though not as he may have intended. Following his bullish stance on Bitcoin last Friday, the leading cryptocurrency dropped 5%, wiping approximately $5,000 off its value.
The market's reaction led to substantial fallout for traders using leverage, with long position liquidations hitting $344 million - the highest forced closure level in 11 days.
During his Tuesday show, Cramer pushed back against critics who suggested his endorsement marked a market top. "I got a bunch of yahoos saying I called the top on crypto by recommending it," he remarked, dismissing references to his previous market predictions.
The television host justified his pro-crypto position by pointing to government spending and deficit concerns, though he admitted limitations in cryptocurrency's proven track record as an economic hedge. "While there's no proof crypto can protect you from anything, at least not yet, it's a plausible story," he noted.
His latest market call adds to a complex history with digital assets. Over the years, Cramer's stance has swung dramatically - from boasting about Bitcoin profits that funded a farm purchase to declaring cryptocurrencies worthless, then later praising Bitcoin's staying power.
The host's mixed track record has spawned an unusual trading phenomenon known as the "Inverse Cramer" strategy, where investors deliberately take positions opposite to his public recommendations.
In his recent commentary, Cramer advocated for including both Bitcoin and Ethereum in investment portfolios, though he attached a notable caveat - his recommendation depends on current economic conditions remaining unchanged.
The market's immediate negative reaction to Cramer's endorsement highlights the cryptocurrency community's growing skepticism toward mainstream financial pundits, especially those with inconsistent prediction records.