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Jim Cramer has sold his BTC holding amid the speculation that Bitcoin prices are soon going to see the bear market. The host of the CNBC show has shared that BTC is going to see a downward trend due to China’s renewed regulated clampdown.
Jim Cramer, the host of CNBC’s Mad Money has sold his bitcoin holdings amid speculation. While talking to an interviewer, he shared his view that BTC is not going up because of structural reasons. He has highlighted China’s renewed regulated clampdown to be the reason for losing his faith in bitcoin.
China’s stand on Bitcoin
He further said that the central government of China understands bitcoin to be a direct threat to the regime. Bitcoin is capable of controlling monetary flows within the country. The country has described cryptocurrency as a system that is outside of its control.
The crypto mining ban in China has tumbled the bitcoin hash rate. It went on for eight-month because mining operations were either shut down or moved offshore. China is also responsible for shutting down crypto trading. The central bank has also requested other banks and payment institutions like Alipay and Wechat to put a hold on the service for accounts associated with crypto trading activity.
He also argued that the BTC’s hash rate reduction would have in turn resulted in gains for the asset’s price. He said that if the bitcoin is outlawed instead of going up or if mining is made tougher, bitcoin will surely go down as if people are saying they have to redeem when you limit the bitcoin mining. It should ideally go up, unless there is worldwide redemption.
Warning to US regulators
Cramer has also cautioned US regulators that they should take action against firms that pay ransomware attackers. These attackers hamper businesses from handling crypto assets. Citing the example of the Colonial Pipeline ransomware case, where the company has given $4.4 million Bitcoin as ransomware, it caused fuel shortage in the southeast region of the U.S. The enforcement agencies stepped up to recover $2.3 million worth of BTC.
He feels that ransomware becomes out of control in the U.S. and Colonial is just not the first company to pay ransomware. They are the first to shut down the East Coast.
The role of tether
Tether is a weak link as per Cramer that undermines the crypto market. There is a persistent controversy regarding the reserves backing USDT. He said that people are unaware of the commercial paper that backs them, and yet they are one of the largest buyers. But no one is found doing business with them.
Cramer has sold off his BTC, not for the first time but he did it in April when he paid his mortgage in the form of bitcoin. He had described this experience as using unreal money for real money.
The downturn in crypto markets began in Mid May and the prices of Bitcoin has declined by 42% as per the CoinGecko data. The prices of bitcoin dropped from $56,928 on May 12 to around nearly $31,000 till date
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