Coin Citadel (CCTL)

[Captainandy]

Jim Cramer"Bitcoin to $1 Million Dollars"


Jim Cramer is the latest to join the Bitcoin to $1 Million Dollars Club


https://steemit.com/cryptocurrency/@jrcornel/jim-cramer-is-the-latest-to-join-the-bitcoin-to-usd1-million-dollars-club

As I was watching "Squawk on the Street" this morning, I saw a familiar face.
Jim Cramer is frequently a guest on the CNBC segment. Today he was talking about Bitcoin. A topic he, as well as a host of others, have commented on quite a bit lately.

Today Jim Cramer was responding to comments made recently by Business Insider CEO Henry Blodget, who earlier stated that he could see Bitcoin trading for $1 million dollars some day or for less than a dollar.


According to Blodget, Bitcoin has no intrinsic value currently so it's impossible to value. However, there is no cash flow to max it out either. So, basically it's upside is infinite while it's down side stops at zero. Many people are catching on to that fact and are picking up some as a speculative investment.

A trend that could continue for a long time says Blodget.

According to Blodget, the chart below is the most important factor in determining whether Bitcoin's price can sustain current levels and even keep going up.


It's a chart of Bitcoin's daily transactions.

His reasoning is that currently there aren't a lot of use cases for the currency, but as more and more use cases pop up, the demand for it will also keep increasing. As that happens the price will continue to go up and as the price goes up it will only increase the desire for people to figure out how to use it. A kind of self fulfilling price cycle if you will.

Jim Cramer's response to this was somewhat different.
Although Cramer also believes that Bitcoin could reach $1 million dollars someday, he differs in what is driving it right now.

Cramer says there are already real use cases. A major one coming from an area that you might not expect at first glance. Cramer has talked to a lot of businesses overseas and he is hearing the same sorts of things from many of them. They are all buying Bitcoin has a hedge against cyber criminals.

I actually wrote a piece on this very topic a few weeks ago. It can be seen here:

https://steemit.com/bitcoin/@jrcornel/an-unexpected-source-of-demand-for-bitcoin

It appears ol' @jrcornel was a couple steps ahead of the wily Jim Cramer. ;)

Cramer believes that these companies are providing real world demand for the coins, which is different than a bunch of speculators buying them with hopes of selling to someone willing to pay a higher price down the road. The greater fool theory.

The Greater Fool Theory can be defined as:

"The price of an object is determined not by it's intrinsic value, but rather by irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price. In other words, one may pay a price that seems "foolishly" high because one may rationally have the expectation that the item can be resold to a "greater fool" later."
Adam White, (head of Coinbase's digital currency exchange) was quick to pour cold water on Cramer's ideas.
Adam immediately responded to Cramer's comments saying that he feels the surge in Bitcoin is unlikely to be mostly due to the buying by companies in order to pay cyber-ransoms.


His exact words were these:

"I think that's a stretch"
I tend to agree with Adam on this one. I do think companies are certainly accounting for a portion of the demand, but I don't think they are the number 1 driving force right now.

However, a recent survey in Europe showed 1/3rd of all companies polled had purchased Bitcoin in the last year as a hedge against a potential cyber attack.



That number is a lot higher than I would have originally guessed and I am sure that is partly where Cramer is coming from with his ideas.

More and more people are joining the club.
Either way, it appears the club is growing.

Jim Cramer now joins the likes of Wenses Casares, Kay Van-Peterson, Henry Blodget, and a host of other analysts and commentators that think Bitcoin and the cryptocurrency space could go a lot higher than current levels.