Jim Cramer is the latest to join the Bitcoin to $1 Million Dollars Club
As I was watching "Squawk on the Street" this morning, I saw a familiar face.
Jim Cramer is frequently a guest on the CNBC segment. Today he was talking about Bitcoin. A topic he, as well as a host of others, have commented on quite a bit lately.
Today Jim Cramer was responding to comments made recently by Business Insider CEO Henry Blodget, who earlier stated that he could see Bitcoin trading for $1 million dollars some day or for less than a dollar.
Henry Blodget's video can be seen here:
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According to Blodget, Bitcoin has no intrinsic value currently so it's impossible to value. However, there is no cash flow to max it out either. So, basically it's upside is infinite while it's down side stops at zero. Many people are catching on to that fact and are picking up some as a speculative investment.
A trend that could continue for a long time says Blodget.
According to Blodget, the chart below is the most important factor in determining whether Bitcoin's price can sustain current levels and even keep going up.
It's a chart of Bitcoin's daily transactions.
His reasoning is that currently there aren't a lot of use cases for the currency, but as more and more use cases pop up, the demand for it will also keep increasing. As that happens the price will continue to go up and as the price goes up it will only increase the desire for people to figure out how to use it. A kind of self fulfilling price cycle if you will.
Jim Cramer's response to this was somewhat different.
Although Cramer also believes that Bitcoin could reach $1 million dollars someday, he differs in what is driving it right now.
Cramer says there are already real use cases. A major one coming from an area that you might not expect at first glance. Cramer has talked to a lot of businesses overseas and he is hearing the same sorts of things from many of them. They are all buying Bitcoin has a hedge against cyber criminals.
I actually wrote a piece on this very topic a few weeks ago. It can be seen here:
https://steemit.com/bitcoin/@jrcornel/an-unexpected-source-of-demand-for-bitcoin
It appears ol' @jrcornel was a couple steps ahead of the wily Jim Cramer. ;)
Cramer believes that these companies are providing real world demand for the coins, which is different than a bunch of speculators buying them with hopes of selling to someone willing to pay a higher price down the road. The greater fool theory.
The Greater Fool Theory can be defined as:
"The price of an object is determined not by it's intrinsic value, but rather by irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price. In other words, one may pay a price that seems "foolishly" high because one may rationally have the expectation that the item can be resold to a "greater fool" later."
Adam White, (head of Coinbase's digital currency exchange) was quick to pour cold water on Cramer's ideas.
Adam immediately responded to Cramer's comments saying that he feels the surge in Bitcoin is unlikely to be mostly due to the buying by companies in order to pay cyber-ransoms.
His exact words were these:
"I think that's a stretch"
I tend to agree with Adam on this one. I do think companies are certainly accounting for a portion of the demand, but I don't think they are the number 1 driving force right now.
However, a recent survey in Europe showed 1/3rd of all companies polled had purchased Bitcoin in the last year as a hedge against a potential cyber attack.
That number is a lot higher than I would have originally guessed and I am sure that is partly where Cramer is coming from with his ideas.
More and more people are joining the club.
Either way, it appears the club is growing.
Jim Cramer now joins the likes of Wenses Casares, Kay Van-Peterson, Henry Blodget, and a host of other analysts and commentators that think Bitcoin and the cryptocurrency space could go a lot higher than current levels.
https://steemit.com/bitcoin/@jrcornel/want-to-become-a-bitcoin-millionaire-here-s-how
Their predictions can be read in more detail in the posts linked above.
Hopefully they are right!
Stay informed my friends.
Sources:
http://www.cnbc.com/2017/06/07/cramer-says-its-possible-bitcoin-could-reach-1-million-one-day.html
https://en.wikipedia.org/wiki/Greater_fool_theory
Image Sources:
http://www.cnbc.com/2016/11/08/cramer-remix-your-post-election-stock-market-playbook.html
http://www.coindesk.com/data/bitcoin-daily-transactions/
Follow me: @jrcornel
I would like to see Cramer's take on Steemit. That would be the day.
Interesting to see Cramer's take on Bitcoin.
I watched his show for years and have a great deal of respect for his assessment.
Great post as always @jrcornel
Funny, I was thinking of posting roughly the opposite.
It's dismaying to see Cramer on this list. He's been a contrarian indicator, and ...well, "out there". I feel he's what you'd get if you gave MSNBC the South Park "Sexy Action News" Treatment:
I profited from watching Cramer's show.
Are you unconcerned that his reasoning for "BTC $1 million" is ludicrous, and demonstrates he has no idea what he is talking about?:
"I think it could because the European banks are frantically trying to buy them so they can pay off ransomware. It’s a short-term way to be able to deal with cybersecurity. It is the way to pay off the bad guys,” Cramer said on “Squawk on the Street."
Ahem,
"In the case of WannaCry ransomware, the biggest ransomware attack in history, the distributors earned less than $100,000. That is only 0.0012 percent of the European Bitcoin exchange market."
Absolutely I'm concerned and take everything Cramer says at face value.
His "BTC $1 million" is ludicrous and I give that stament no value whatsoever.
I just love Cramer's crazy style and he and his show put the spotlight on countless potential plays in which after my own research I made. I only stopped watching because I hired a financial advisor who I know and trust to manage our nest egg so I can focus 100% on business and family.
I see a lot of people here that have an acc est of 1m roughly. Sadly most of the famous people don't bother following or contributing to their followers which is a bit sad.
Buy early, and early is still now, and any ransomware attacks 5 years down the line they can manage.
At $1,000,000 bitcoin, the smallest unit of bitcoin a Satoshi which is 1/100,000,000 th of a bitcoin would be worth .01 USD a penny. Looks like it was meant to be. https://steemit.com/money/@natxlaw/million-dollar-bitcoin-here-is-how-it-happens-satoshi-is-the-new-penny
That is very interesting. Thanks for sharing!
1M someday? oh please let that someday come sooner
The problem with the $1M Bitcoin is that.....thats a number using the US Dollar as the base currency. What does "A Million Dollars" MEAN 10 years from now? What if a loaf of bread costs $100 by then? Better to ask yourself how much BTC you need in order to be financially free...today. And THAT number is much less than a million bucks. Try to get THAT much. Because $1M is really just a cultural number that means success, wealth, etc. A Freedom number is much more important and is much more realistic and useful to attain.
hmmm.. so true
but to be financially free - better invest whatever we've gained in BTC in plenty of passive income resources - the kinds that would outnumber our expenses
how much BTC do I need to be FF? A lot!
you there already?
No problem, thanks for the upvote!
Well, BTC already died 170+ times, so yes USD 1.000.000,- is in the cards. Just to bad Mark Cuban is missing out LOL!!!
I'm guessing Cuban wanted the price to go down so he could buy more of it.
I think Cuban is just jealous. He is a clever person, but he is lost on this subject.
Yep, here is the proof:
~this photo is taken in the future :D
haha so true!
Not missing out, he invested 20 bucks in Bitcoin.
https://twitter.com/mcuban/status/872121422071697408
Disclaimer: I am just a bot trying to be helpful.
Put a few drinks in Mark Cuban and you'd see him slurring his words and ranting about HODLing his blockchains...he's in it, in secret. At some point he'll come out, trying to be all expert on the topic. Cuban got lucky, he's no genius.
I am not a crypto-maniac and am actually very new with that. My opinion on the topic, that may be very naive, os that the value of a currency is connected to its usage. As long as cryptocurrencies will have a real usage (for instance, buying some goods), they will be valued. In the case of a speculation-only usage, then I would tend to agree that the value is random.
Yes. I think that is exactly what both of these guys were saying. They both agree on that, but one thinks there isn't enough usage yet and the other thinks there is starting to be.
Ooh I see. I missed this subtlety :)
Thanks for precising!
I can hear the corny sound effects right now. "BUY, BUY, BUY!"
When that happens it will be time to head for the exit!
He was once against bitcoin as in a clip in youtube and now he changed!
Oh Oh. Cramer is talking Bitcoin up? Get ready for a sell-off..