(Kitco News) As bitcoin hit two-week lows Monday, CNBC's Jim Cramer said he "sold almost all" of his bitcoin, citing concerns over China's crypto mining crackdown and ransomware attacks.
"Sold almost all of my bitcoin. Don't need it," Cramer told CNBC's "Squawk on the Street" on Monday.
Bitcoin began the week with another significant selloff. The cryptocurrency neared the $30,000 level after China intensified its crackdown on crypto mining. At the time of writing, bitcoin was trading at $32,730, down nearly 5% on the day, after hitting a daily low of $31,744.
According to media reports, the price drop was triggered over the weekend as China's crypto mining crackdown extended to the southwest province of Sichuan.
Reuters cited a notice issued by the Sichuan Provincial Development and Reform Commission and the Sichuan Energy Bureau on Friday, which called for the closure of 26 crypto mining operations by Sunday.
There was also a report by the Chinese state media outlet Global Times over the weekend, which stated that more than 90% of China's bitcoin mining capacity was going to be shut down, at least in the short term, as local regulators implement similar measures as in the Sichuan province.
On top of these headlines, the People's Bank of China said it called on major banks and Alipay, a payment service run by Alibaba affiliate Ant Group, to crack down on crypto trading.
In response to China's new restrictions, MicroStrategy CEO Michael Saylor said that it is a "tragedy for China and a benefit for the Rest of the World over the long term."
The dominant driver of #Bitcoin right now is the crackdown on mining & trading in China that began in May. This created a forced & rushed exodus of Chinese capital & mining from the Bitcoin network - a tragedy for China and a benefit for the Rest of the World over the long term.
— Michael Saylor (@michael_saylor) June 19, 2021
The Chinese crackdown on mining is a tragedy for China, a nuisance for #Bitcoin, and a windfall for North American Bitcoin miners. https://t.co/IaVUbqPCJ9
— Michael Saylor (@michael_saylor) June 17, 2021
On top of that, MicroStrategy announced on Monday that it bought another 13,005 bitcoins, bringing the total to over 100,000 tokens worth more than $3 billion.
"MicroStrategy has purchased an additional 13,005 bitcoins for ~$489 million in cash at an average price of ~$37,617 per bitcoin. As of 6/21/21 we #hodl ~105,085 bitcoins acquired for ~$2.741 billion at an average price of ~$26,080 per bitcoin. $MSTR," Saylor tweeted.
On the other hand, Cramer is shifting gears away from bitcoin after embracing the cryptocurrency last year. He noted two significant headwinds as he discussed the decision to sell his bitcoin: China's crackdown and ransomware attacks in the U.S.
"When the PRC [People's Republic of China] goes after something, they tend to have their way. ... It's not a democracy. It's a dictatorship … They believe it's a direct threat to the regime because what it is is a system that's outside their control," he said. "In our country, I think it's outside of our control when it comes to ransomware, and I doubt that Colonial is the first company to pay ransomware. I think they're the first that almost shutdown the East Coast … The Justice Department and the FBI and the Federal Reserve and Treasury could coalesce and say,' OK guys, if you pay ransomware, we're going to go after you."
Cramer also questioned why the bitcoin price is dropping in light of the crypto's mining capacity being limited, highlighting that if gold's mining capacity was cut, the precious metal's price would go up.
"Instead of thinking that bitcoin should go up if it is outlawed or if it is made tougher to be mined, bitcoin goes down as if people are saying 'I've got to redeem'… When you limit mining, it should obviously go up unless there's a worldwide redemption," he said.
Back in March, Cramer advised diversifying a 10% allocation to gold with the 5% gold and 5% bitcoin breakdown.
"I have, for years, said that you should have gold ... but gold let me down," Mad Money's host Cramer said during his appearance on the Pomp Podcast." I've been saying 10% gold since 1983. And now, I say 5% in gold, 5% in bitcoin."
Cramer added that at some point in 2020, he invested $500,000 in bitcoin, stating that Anthony Pompliano, the co-founder of Morgan Creek Digital Assets, inspired him to do so and made him "a ton of money."
Then in the middle of April, Cramer revealed that he trimmed his bitcoin position to pay off his home mortgage. During that time, the cryptocurrency was trading around its record highs of above $64,000.
"It was so great to pay off a mortgage. It was like, kind of, phony money paying for real money," Cramer said. "I now own a house — lock, stock and barrel — because I bought this currency."
https://news.google.com/__i/rss/rd/articles/CBMiggFodHRwczovL3d3dy5raXRjby5jb20vbmV3cy8yMDIxLTA2LTIxL0ppbS1DcmFtZXItc2VsbHMtYWxtb3N0LWFsbC1vZi1oaXMtYml0Y29pbi1hcy1wcmljZXMtaGl0LTItd2Vlay1sb3dzLW9uLUNoaW5hLWNyYWNrZG93bi5odG1s0gEA?oc=5
2021-06-21 16:44:00Z
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