Jim Cramer Warns Crypto Traders: Market Moves Before the Narrative, Not After

• Jim Cramer warns crypto traders that overhyped Bitcoin and altcoin narratives are already priced in
• Institutional crypto investors front-run retail by reacting before Bitcoin news becomes mainstream
• Popular crypto narratives fail to impact Bitcoin price as markets absorb events before retail reacts

CNBC’s Jim Cramer has a clear message for investors: stop banking on widely popular market predictions if you want to succeed. 

In his latest podcast, Cramer explained how experienced investors interpret market scenarios and sentiments, especially when opinions become widespread, with many participants aligning with the same narrative.

Why Consensus Views Often Fail Investors

According to Cramer, getting excited about something that everybody else expects is useless and does not result in profitable investment judgments. He says that by the time a particular story or expectation is common knowledge, the market has typically already factored that information into current prices. Trying to profit from it then is often too late.

Cramer’s philosophy about successful financial investment lies in understanding that the stock market travels at the speed of thought. Hence, the secret to profitable investment is the early interpretation of crucial scenarios before they become widespread.

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For instance, hedge fund and mutual fund managers often have the same view of the economy. The effect of their conclusions plays out even before the actualization of such perceptions.

Aligning with Institutional Moves: Cramer’s Core Advice

The analyst emphasized that an investor’s aim should be to understand the outlook of institutional participants like hedge fund and mutual fund managers and align with them early enough before the actual events. This approach, he suggests, allows investors to catch early price movements and avoid being caught flat-footed after the news is already public and its impact potentially diminished.

This investment philosophy holds true for the cryptocurrency market as well, Cramer implied. The situation is such that hardly any sudden events move crypto prices without being “over-flogged” and heavily analyzed by users. 

Related: Standard Chartered: Bitcoin Correction Linked to Stock Market Dip

That explains why most crucial events do not have the expected effect on crypto prices nowadays, unlike in the past, when sudden changes trigger massive price movements and offer investors the opportunity to enter the market.

From Cramer’s perspective, actual events hardly affect stock prices anymore. However, the narratives leading to the events appear to take precedence, making it crucial for investors to focus on understanding the narratives ahead of time. They can do so by tracking hedge funds and other institutional investors, adopting a strategy akin to “Buy the rumor and sell the news.”