A popular crypto trader has doubled his portfolio thanks to a highly unconventional strategy. What is it?
CNBC host Jim Cramer has a highly controversial reputation in the crypto community. The fact is that traders have long noticed the “unreality” of Cramer’s predictions. To be fair, the latter do come true, but in exactly the opposite way. And you can even make money on such “false signals” – at least that’s what an amateur cryptocurrency trader nicknamed Algod managed to do. In the past month, he doubled the investment portfolio allocated to his experiment. All he did was make trades opposite to Kramer’s predictions. We tell you more about what’s going on.
Algod has over 160,000 followers on Twitter. The crypto-enthusiast became especially popular after his controversy with Terra founder Do Kwon. As a reminder, in March, the trader bet a million dollars that the value of the altcoin Luna in the Terra ecosystem would drop significantly within a year. Do Kwon took part in the bet, and within a couple of months the price of Luna had collapsed to almost zero.
Do Kwon and Algod dispute on Twitter
It's unlikely that Kwon gave the crypto-enthusiast his well-deserved million, but the dispute itself was a very ironic development in light of the collapse of the Terra ecosystem. The project disaster resulted in multi-billion dollar losses and a serious decline in the crypto market.
Since then, a popular representative of the digital asset industry has come up with a new money-making option that has already worked.
Let's also talk about Cramer himself, who is the host of CNBC and also frequently comments on various markets - including cryptocurrencies. In early July, for example, Jim began to panic about the ongoing collapse of the coin niche and made it clear that he expected the industry to fall further. As a result, the market went in the opposite direction, with the host confirming his ability to completely misunderstand the market. You can read more about his "predictions" in a separate article.
How to make money from cryptocurrency
An experiment called “Inverse Cramer” – that is, “reverse Cramer” – began on July 18. At that time, Algod announced the creation of a separate crypto portfolio that would trade Bitcoin with leverage of 2x, i.e. using borrowed funds from cryptocurrency exchanges. At launch, the portfolio was worth 35 ETH or around $51,470.
Algod’s tweet announcing the launch of the experiment
A little over a month later, the crypto-enthusiast boasted that Inverse Cramer had almost doubled in dollar value to $101,440. The success is pretty impressive, although the trader does not forget to constantly warn that his strategy is very risky for his subscribers.
“On 5 August, Jim Cramer announced a major investment in Tesla. On the same day, Ilon Musk sold $6.9 billion worth of shares.”
“Inverse Cramer” has in a sense already become a meme in the cryptocurrency community after its popularity on Reddit and Twitter. The strategy works very simply – if Jim Cramer talks about buying a certain stock, then it’s time to sell. If it’s the other way around, it’s time to buy. The same approach is true for the crypto market: when a broadcaster keeps talking about a cryptocurrency’s imminent collapse, it means it’s time to buy it, says the author of the idea. That’s exactly the reverse strategy he was pursuing.
CNBC anchor Jim Cramer
MORE INTERESTING STORIES ABOUT CRYPTO ON YANDEX.ZEN!
Another prediction recently aired on the same CNBC channel – this time from Skybridge Capital CEO Anthony Scaramucci. He said that Bitcoin is too early to be considered a great tool for inflation protection. The cryptocurrency will allegedly acquire such properties only when the total number of ever active Bitcoin wallets reaches the one billion mark. Here’s a relevant quote from the expert.
Until we reach a billion or more, I don’t think Bitcoin would be considered a good hedge against inflation, as the asset is still in its early stages of adoption.
Skybridge Capital CEO Anthony Scaramucci
According to Cointelegraph sources, it is almost impossible to determine the exact number of cryptocurrencies in the moment. According to Buy Bitcoin Worldwide, the number now stands at around 200 million. BTC holders are even smaller, at around 106 million. As a reminder, creating a cryptocurrency wallet does not automatically make a person a BTC owner, because cryptocurrency network addresses can be empty and they themselves are created when a transaction is made, receiving so-called change in return.
Bitcoin wallet statistics
Scaramucci himself is quite optimistic about Bitcoin’s long-term future. He expects the asset to grow because he sees a positive impact in the news that the cryptocurrency has been adopted by the world’s largest investment firm, BlackRock. He says the crypto market is now “crowded” with traders’ short positions, causing them to “get trapped when they least expect it”.
A “trap” in this context refers to a massive liquidation of short positions or shorts due to a potential sharp upward move in the BTC price. A cascade of position liquidations will only lead to an acceleration of price increases, and it really can happen at any time – just an organized large market buying of BTC by a group of large investors.
We believe that the Algod experiment clearly demonstrates what fate certain "experts" predictions deserve. Some of them are wrong almost every time, but for some strange reason they keep voicing their versions of what is happening and the near future. So, the conclusion is obvious: cryptocurrency investors and traders should rely solely on themselves, because popular personalities in the niche are also wrong. That way, at least they can take responsibility for what happens.
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