Months After Shilling $3,000 ETH, Cramer Says Crypto Has ‘No Real Value’

Cramer memorably said in April that he was “a believer” in Ethereum and suggested that investors could “easily” knock 40% returns on the asset. It was trading for about $3,000 at the time.

Jim Cramer is changing his tune on Crypto

Now that crypto prices have fallen, Jim Cramer has indicated that he’s not a big fan of the emerging asset class after all.

“Crypto really seems to be imploding. Went from $3 trillion to $1 trillion. Why should it stop at $1 trillion? There’s no real value there,” says @jimcramer on #crypto. “What a terrible resource. NFTs sold to you. Invented.” pic.twitter.com/09e5ST8q0N

— Squawk Box (@SquawkCNBC) 5 July 2022

Talking further CNBC‘s Squawk Box on Tuesday, the former hedge fund manager discussed the months-long downtrend spreading across global markets, noting that he was most interested in the current state of the cryptocurrency market. “Crypto really seems to be imploding. When it goes from $3 trillion to $1 trillion, why should it stop at $1 trillion? There’s no real value there,” he said regarding the sharp decline in global crypto market capitalization over the past eight months, before commenting on the growing number of companies facing turmoil due to the recent market collapse. “How Many Companies Can Sam Bankman-Fried Save?” he added.

Last week, the US arm of Bankman-Fried’s FTX exchange struck a deal with BlockFi to buy the firm for up to $240 million amid the lender’s insolvency woes. Alameda Research, the trading firm founded by Bankman-Fried, also stepped in to rescue Voyager Digital last month when the firm announced it was suffering its own liquidity crisis. The spillover effects of Terra’s recent implosion and Three Arrows Capital’s explosion have wreaked havoc across the industry and partially contributed to the recent market crash. After a number of firms disclosed their problems, Bankman-Fried said Forbes that he believes many more exchanges may be “secretly insolvent.”

Cramer’s previous comments on Ethereum

Cramer’s latest comments will likely come as a surprise to some given his previous thoughts on crypto. In April he did declared on Squawk Box that he thought Ethereum was “awesome” and that he was “a believer.” He then said that investors “could easily get [returns of] 35 or 40%.” ETH has since fallen from a price of $2,970 to $1,100, meaning that anyone who invested when he made the comments would have incurred losses of over 60%.

Cramer also said in June 2021 that he liked Ethereum over Bitcoin because “people use [ETH] to be able to buy things,” revealing that he had bought ETH and would continue to increase his holdings. It traded for just over $2,000 at the time. Before diving into Ethereum, he recommended investors allocate 5% of their portfolios to Bitcoin as it led the crypto bull in early 2021.

Along with the rest of the cryptocurrency market and other risky assets, ETH has had a rocky 2022, down around 70% so far this year. In particular, major tech stocks such as Meta, Netflix and PayPal have all reported losses of more than 50% amid Federal Reserve interest rate hikes and growing fears of a global recession.

While Cramer pointed to the recent explosions of crypto firms and the NFT market to argue why the space had no value, he did not mention any recent innovations such as DeFi trading, stablecoins, Layer 2 rollups or the value of NFT art itself in his comments .

During market downturns, crypto-believers are known to call each other to “HODL” and “buy the dip,” mantras that advocate holding on and accumulating more coins whenever charts turn red. Despite his previous comments, it appears Cramer is no longer one of them.

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.