Cryptocurrency Skeptic Jim Cramer Says Banks are Pressured by Digital Assets

Throughout 2017 and early 2018, former hedge fund manager and financial analyst on CNBC, Jim Cramer, expressed his skepticism towards Bitcoin and the cryptocurrency market, encouraging investors to be cautious.

This week, on CNBC Mad Money, Cramer emphasized that Bitcoin and PayPal are pressuring banks and major financial institutions already at risk of losing relevance due to the emergence of more efficient alternatives.

Although Cramer has expressed support of the cryptocurrency market, he stated that the value of cryptocurrencies is questionable.

Fast forward six months, Cramer now believes that the cryptocurrency market can challenge the traditional finance industry with more innovative and efficient systems for transaction settlement that can appeal to millennials.

The cryptocurrency market experienced a 70% drop since its all-time high and assets like Bitcoin, Ethereum, and Bitcoin Cash have fallen by more than 65%. As a former hedge fund manager, it is possible that Cramer, similar to the vast majority of large-scale retail and institutional investors, sees an opportunity to enter the market and is now more comfortable expressing his support for the cryptocurrency market.

In 2018, the cryptocurrency market experienced the eruption of the same bubble it saw in 2014.

The bubble of retail investors or individual traders led the market to drop by more than 70%. But, within 12 months, the cryptocurrency market recovered and gradually gained momentum four years ago.

The market could replicate a similar trend in late 2018, especially if institutional investors finally enter the market with robust custodian solutions.

The public market also began to demonstrate more optimism towards financial companies that either completed the integration of major cryptocurrencies or plan to enter the cryptocurrency market in the short-term.

The market valuation of Square, which has been offering Bitcoin exchange services for the past year, increased by 182%, from around $9 billion to $25 billion.