Mad Money host Jim Cramer has advised investors to avoid cryptocurrencies and stick with gold if they “really want a real hedge against inflation or economic turmoil”. He added that bitcoin is too volatile to use as a currency. “Imagine business owners trying to do trades in shares of Facebook or Google… it’s ridiculous,” he insisted.
Jim Cramer Prefers Gold To Cryptocurrency
CNBC’s Mad Money host, Jim Cramer, offered some gold and crypto-related investment advice on Monday. Cramer is a former hedge fund manager who co-founded Thestreet.com, a financial news and knowledge website.
He believes that investors should stay away from cryptocurrencies despite bitcoin’s recent gains. Referring to the charts explained by Carley Garner, senior commodity strategist and options broker at Decarley Trading, Cramer emphasized that investors “need to ignore crypto cheerleaders when bitcoin is rising again.” He went on to advise:
If you really want a real hedge against inflation or economic chaos, she [Garner] say you should stick with gold. And I agree.
Citing Garner, the Mad Money host explains that the correlation between bitcoin futures and the tech-heavy Nasdaq-100 is very high, as shown in their daily chart from March 2021. This shows that bitcoin behaves more like a risky asset than a store of value or stable currency, Cramer stated, explaining:
Imagine business owners trying to make trades in shares of Facebook or Google… ridiculous, they are so volatile. Bitcoin is no different.
Cramer also warns of “counterparty risk,” the possibility that the other party to a transaction or investment fails to fulfill its obligations. “Of course, you can just own bitcoins directly in the decentralized wallet — that protects you from counterparty risk,” he said. “But if you want to use it for anything, the risk is still on the table. And like FTX customers have learnedit can be devastating.”
Host of Mad Money used for investment in bitcoin, ether and non-fungible token (NFT) but he sold all of his crypto holdings last year. He once suggested bitcoin along with gold. In March 2021, he speak: “For years, I’ve been saying you should have gold… but gold let me down. Gold has suffered too many ups and downs. It depends on the mining problem. Honestly, it can fail in many cases.”
He has also repeatedly warned that the US Securities and Exchange Commission (SEC) is doing a “summary” of non-compliant crypto companies, advises investors to get rid of crypto now. “I won’t touch crypto in a million years,” he emphasize. Cramer often quotes John Reed Stark, the former director of internet enforcement for the SEC, who recently said “prescribed attack has only just begun.”
What do you think of Jim Cramer’s advice? Let us know in the comments section below.
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