CNBC “Mad Money” host Jim Cramer said investors of BTC, ETH, DOGE should allocate profits in their crypto portfolios before things get worse due to the weakness seen due to the fight with Chinese real estate developer Evergrande.
Cramer “begs” investors to take profits
Cramer said that crypto proponents don’t like to hear the word “sell,” but he “begs” investors gaining in cryptocurrencies to sell some of their holdings and come back to weigh in on their heads as things start to clear up. Cramer said on his show, “Don’t let this be a loss. Sell some, let the rest stay, then let’s wait and see if China changes its stance towards the Evergrande bailout,” he said.
Cryptocoin. com, Cramer, who previously announced that he has a position in Ethereum (ETH), said that his concerns started with Tether (USDT), a stablecoin fixed to the US dollar. Tether is the third largest cryptocurrency by market cap, after only Bitcoin (BTC) and Etherereum (ETH).
Cramer: Drop may even affect BTC, ETH, DOGE and crypto-focused stocks
“The problem with Tether is that it’s backed by a variety of holgs, and roughly half of them are commercial paper (short-term loans). But we don’t know about Chinese commercial paper,” he said. Tether added that even without any Evergrande exposure as it claims, “tons” of Chinese businesses could be crushed by Evergrande exposure, which could trigger a domino drop.
Cramer said it’s not just Tether investors who are at risk, in such a scenario a drop would “destroy the entire crypto ecosystem.” The former hedge fund manager recommended that if you “have cryptocurrencies in any form”, some profit should be made, implying that such a drop would impact Bitcoin, Ethereum, Dogecoin and possibly even crypto stocks.
Bitcoin and Ethereum are trading significantly lower in a broader market sell-off triggered by rising concerns that Chinese real estate giant Evergrande’s current debt could lead to a collapse. Evergrande is a major real estate developer in China and also has numerous other business units operating in industries such as healthcare, series and electric vehicles. The company’s total debt is more than $300 billion, and it warned investors that they could default on their debt soon.