Jim Cramer, the animated host of CNBC’s “Mad Money,” has become something of an unintentional crypto market indicator—just not in the way he probably hoped.

The commentator defended his crypto stance Tuesday during another installment of his market entertainment show, citing government spending and deficit concerns.

On Friday, the firebrand stock enthusiast issued a bullish call on Bitcoin, sending Crypto Twitter into a frenzy and prompting onlookers to declare that the asset had peaked.

Two days later, Bitcoin’s price fell 5%, erasing nearly $5,000 from its value and pushing long liquidations to an 11-day high above $344 million.

“I got a bunch of yahoos saying I called the top on crypto by recommending it,” Cramer said, adding there were people who wanted to “rake me over the coals for something I did wrong 10, 15, 20 years ago.” 

Cramer argued for crypto’s inclusion in investment portfolios despite acknowledging no concrete evidence supporting it as a hedge against economic instability.

“While there’s no proof crypto can protect you from anything, at least not yet, it’s a plausible story,” he said.

Cramer’s notorious track record of making spectacularly wrong calls has made him a living meme within certain crypto circles, particularly among young traders. 

His commentary has become so infamously contrarian that some traders developed an “Inverse Cramer” strategy, believing doing the opposite of whatever he recommends is a path to profits.

The former hedge fund manager has had quite the rollercoaster relationship with Bitcoin and other cryptos over the years: from boasting about buying a farm with Bitcoin profits to flip-flopping between calling them worthless and saying nobody can kill Bitcoin.

“I think Bitcoin, Ethereum, and maybe even some other cryptocurrencies deserve a spot in your portfolio, too,” Cramer said during Tuesday’s show.

Despite maintaining that crypto deserves a spot for his audience’s portfolio, Cramer’s endorsement came with a notable caveat:  he might “change his tune” if the deficit gets under control.

Edited by Sebastian Sinclair

Bitcoin (BTC) has dropped 7.6% since it almost — but not quite — touched the psychological wall of $100,000 on Nov. 22.

That’s the biggest drop since Donald Trump won the U.S. presidential election, sparking a rally that sent the largest cryptocurrency by market capitalization soaring from a level of around $66,000 through its record high.

Even so, the slide isn’t out of the ordinary. In bull markets bitcoin typically tumbles as much as 20% or even 30%, so-called corrections that tend to flush out leverage in an overheated market.

A large part of the reason the bitcoin price didn’t get to $100,000 was the amount of profit-taking that took place. A record dollar value of $10.5 billion of profit-taking took place on Nov. 21, according to Glassnode data, the biggest day of profit-taking ever witnessed in bitcoin.

At the root of the action are the long-term holders (LTH), a group Glassnode defines as having held their bitcoin for more than 155 days. These investors are considered “smart money” because they tend to buy when the BTC price is depressed and sell in times of greed or euphoria.

From September to November 2024, these investors have sold 549,119 BTC, or about 3.85% of their holdings. Their sales, which started in October and have accelerated since, even outweighed buying from the likes of MicroStrategy (MSTR) and the U.S. spot-listed exchange-traded funds (ETFs).

How long is this selling pressure going to last?

What’s noticeable from patterns in previous bull markets in 2017, 2021 and early 2024, is that the percentage drop gets smaller each cycle.

In 2017, the percentage drop was 25.3%, in 2021 it reached 13.4% and earlier this year it was 6.51%. It’s currently 3.85%. If this rate of decline were to continue, that would see another 1.19% drop or 163,031 BTC, which would take the cohort’s supply to 13.54 million BTC.

Each time, the long-term investors’ supply makes higher lows and higher highs, so this would also be in line with the trend.