Jim Cramer Says Ignore the Bitcoin Hype
Jim Cramer suggests investors ignore Bitcoin hype
Jim Cramer, the host of CNBC's Mad Money, recently advised investors to exercise caution when investing in cryptocurrencies.
###Jim Cramer suggestion to investors
Despite the recent gains in Bitcoin's value, Cramer suggests that investors should consider investing in gold instead.
Bitcoin continued to rise in value on Monday, reaching a high of $23,155.93 as investors bet the Federal Reserve will slow or halt interest rate cuts.
According to Coin Metrics, the digital currency's price rose to $23,333.83 on Saturday for the first time since August. The coin has risen nearly 39% since the beginning of the month.
Cramer said the charts indicate investors "need to ignore the crypto cheerleaders" following Bitcoin's resurgence. If you want "a real hedge against inflation or economic chaos", choose gold, he added.
The basis for his advice is the analysis by Carley Garner, a senior commodity market strategist and broker at DeCarley Trading. The study compares the daily chart of Bitcoin futures to that of the tech-heavy Nasdaq-100 since March 2021.
It is observed that Bitcoin and other cryptos are almost trading in lockstep, suggesting they are risky assets rather than a currency or a stable store of value. Furthermore, the advice is that given the volatility of Facebook and Google shares, it would be unwise for business owners to try to conduct transactions with them, and the same goes for Bitcoin.
According to Cramer, "counterparty risk", which is the possibility that the other party in an investment or transaction might not uphold their end of the deal, is why they trade so closely.
He said that although counterparty risk can be avoided by storing Bitcoin in a decentralised wallet, as it is used for trading, the risk will return. Pointing to FTX collapse, he firmly suggests gold should be the potential investment.
Author: Priya Kumari
Priya is a passionate content writer and the co-founder of Finendorse. She is an enthusiastic crypto investor and has a huge interest in the upcoming digitisation age.