Courtesy of Mish
It’s hard to know when bubbles will end but when analysis goes ape-sh*t batty, it’s easy to know the bubble exists.
Jim Cramer’s analysis of Bitcoin provides a perfect example.
CNBC reports Cramer says it’s possible bitcoin could reach $1 million one day.
The price of digital currency stockpiled by companies to pay off potential cyberthreats could reach $1 million one day, CNBC’s Jim Cramer said Wednesday.
Cramer was responding to a recent comment by Business Insider CEO Henry Blodget, who said bitcoin could go to $1 million.
“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.”
“When you get hit and you’re not sure how to do bitcoin, these cyberattackers have customer service desks,” Cramer said.
What Blodget Really Said
Blodget also mentioned the downside: “Bitcoin could go to $1 million (or fall to $0),” said Blodget maintains the view that “ultimately, Bitcoin has no intrinsic value.”
New Target $1,000,000
The Coin Telegraph reports Bitcoin Price Can Reach $1 Mln: CNBC’s Jim Cramer.
On the CNBC show “Squawk on the Street,” Cramer stated that the demand toward Bitcoin is rapidly increasing and because of Bitcoin’s decentralized nature, its price could potentially enter the $1 mln region, which would bring the market cap of Bitcoin to tens of trillions of dollars.
However, Cramer’s reasoning behind his Bitcoin price prediction was fundamentally flawed as he failed to grasp the core purpose of Bitcoin and why investors are starting to purchase Bitcoin.
“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.”
Such claim is evidently non-factual because the European Bitcoin exchange market only accounts for nine percent of the global Bitcoin exchange market and it is behind the US, Japan, China and South Korea in trading volumes.
More importantly, Cramer’s statement fails to consider the fact that Bitcoin is being utilized as a currency and safe haven asset more than it is being used as a lifeline to feed ransomware developers.
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. Thus, to say that Bitcoin price is rising because of 0.0012 percent of traders from the fifth largest Bitcoin exchange market is not an accurate depiction of the surging Bitcoin price.
Regardless, Cramer believes that Bitcoin price will reach $1 mln one day due to its rapidly increasing trading volumes and demand from investors.
Frantically “Trying” to Buy Bitcoins?!
