Why Cramer Is Wrong About Crypto

by Beth Canova
By Beth Canova

Recently, CNBC’s Jim Cramer said that “crypto is a con collapsing in on itself” and told viewers that “it’s never too late to sell.”

And for anyone who hasn’t been paying attention, it’s easy to understand his position.

The latest news in the FTX saga is the arrest and charging of CEO Sam Bankman-Fried. Binance, another popular centralized exchange, has been the subject of a U.S. Department of Justice investigation since 2018.

And these are just the latest headlines of the failures of centralized crypto platforms.

But did you notice the key word in that sentence?

That’s right, it’s “centralized.”

See, centralized finance isn’t true crypto. That’s because true crypto is fundamentally decentralized and trustless. It requires no broker or middleman to orchestrate your transactions and certainly doesn’t require a banker to maintain custody of your assets.

Centralized platforms rose in popularity because they made accessing crypto easier. But that came at the cost of sacrificing those key tenets of crypto.

This year has proven to investors that decentralized finance is the true future of crypto. Just look at how DeFi has performed in the month since the FTX collapse ...

1. Uptick in DEX Usage

While centralized platforms scrambled to post proof-of-reserves and convince users they were still liquid enough to be safe, decentralized exchanges were sitting pretty.

A new report from Delphi Digital suggests DEX platforms gained 24% volume in the wake of the FTX collapse. And data from Token Terminal reveals that the daily trading volume of decentralized perpetual exchanges reached $5 billion.

So, what made investors flock to DeFi when the floor fell out from yet another CeFi platform?

Transparency and trustlessness.

DEXes didn’t have to do much to persuade shaken investors to trust them — their reserves and trading volume are all transparently available on-chain for users to see. Additionally, DEXes don’t maintain custody of your assets, so there is no risk of losing your crypto if all you were using the platform for was trading.

2. Surge in New Wallet Addresses

Speaking of custody, more users are opening their own wallets to hold their crypto. Glassnode reports that the number of wallets holding at least 1 Bitcoin (BTC, Tech/Adoption Grade “A-”) or more reached 950,000, a new all-time high.

In light of the FTX collapse, more individuals are seeing the truth of the golden rule of crypto: Not your keys, not your crypto.

In the past month, exchanges balances are down to 2.3 million Bitcoin as people move their BTC into their own wallets.

DeFi still has some growing to do, particularly when it comes to user interfaces, ease of navigation and the ability to swap native assets. But those challenges are being addressed, and the projects that get them right have the potential for big profits in the next bull cycle.

But even while we wait for that next run-up, there are still plenty of opportunities in DeFi.

In fact, our own Chris Coney, seasoned crypto educator and editor of our Crypto Yield Hunter, has recently shared the three best ways for Weiss Ratings Members to succeed with DeFi in 2023 … no matter what market the New Year brings.

I suggest hearing what he has to say.

Best,

Beth Canova

About the Contributor

Beth Canova is a veteran of the publishing industry, specializing in cryptocurrency-related information and guidance. As the Managing Editor of some of world’s most astute cryptocurrency experts — Juan Villaverde, Dr. Bruce Ng, Marija Matić and others — she's continually immersed, and well versed, on everything crypto.

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