On Tuesday, Bitcoin’s price dropped and approached the $6000 mark for the umpteenth time this year.
In a discussion on CNBC’s “Squawk on the Street” show, Jim Cramer of CNBC shared some of his bearish sentiments, interpreting the recent drop in the price of the cryptocurrency as a turning of the tides against it.
When asked if he had noticed the continuous downward trend, Cramer referred to an interview he had with Udi Mokady, the CEO of CyberArk.
Based on Mokady’s description of the cryptocurrency ecosystem, Cramer felt that Bitcoin had become an outlaw currency:
Here is what’s happening with Bitcoin. State-sponsored terrorists and really smart guys are getting into the system of a major company and using all the electricity to mine a lot of bitcoin. And I’ve been thinking...This thing has really become like an outlaw currency.
Cramer’s concerns seem to be about cryptojacking and the amount of electricity required for keeping the Bitcoin network alive through mining.
He also referred to the previous bull-run that peaked at $20,000 per bitcoin - calling it “the blow-off short period”.
The ongoing slide in bitcoin’s price since then, according to Cramer, is indicative of the tide turning.
He believes that if the current trend continues, we could see the price of Bitcoin go as low as $800 per coin. Cramer added that he was not certain if this was the end for Bitcoin but recent price movements show that the end could be near:
I'm not saying its time has passed but there is a notion that the sun seems to be setting.
Nvidia and Cryptocurrency mining
Interestingly,Cramer also mentioned Nvidia, one of the chip-making companies that have benefited from the high demand for cryptocurrency mining chips such as GPUs - explaining how Nvidia had immunized itself from an extended crash in cryptocurrency prices.
During last year's crypto bull market the company made sure to inform investors that the revenue from mining chips was not going to perpetually increase. Their new Ryzen processors, moreover, are likely to make up for the decreased demand for mining chips.
Both Bull and Bear Markets Don’t Last Forever
The good news for crypto investors is that the bitcoin price seems to keep bouncing back after reaching the $6,000 low. As long-time holders are aware, bull markets do not last forever and neither do bear markets.
Coinbase boss Brian Armstrong, encapsulated this sentiment in this recent motivational tweet:
4/ When there is hype, people are irrationally exuberant. When there is despair, people are irrationally pessimistic. Neither is true. Reality is always somewhere in the middle, more correlated with real usage (transactions per day) than the price.— Brian Armstrong (@brian_armstrong) June 19, 2018