Jim Cramer says ignore the crypto cheerleaders
Despite recent bitcoin gains, Jim Cramer, host of CNBC’s Mad Money, cautioned investors not to fall victim to crypto euphoria. He advised investors to seek gold as a substitute.
BTC prices higher on Monday
According to Cramer, the value of bitcoin and other cryptos is nearly trading in lockstep which suggests that rather than being a currency or a reliable store of value, they are risky investments.
He continued to say that, given their volatility, it would be absurd for business owners to try and conduct transactions with bitcoin or the shares of Google or Facebook parent companies Alphabet Inc. or Meta Platforms Inc.
On Jan. 23, the price of bitcoin surged further as investors gambled that the Federal Reserve would slow or halt its interest rate reductions. The price of bitcoin reached a high of $23,155.93 on this day.
According to Coin Metrics, the BTC price of the virtual currency increased on Saturday and touched $23,333.83 for the first time since August. Since the beginning of the month, bitcoin has risen by almost 39%.
“Of course, one might own Bitcoin directly in a decentralized wallet, protecting them from counterparty risk. If you wish to use it for anything, the danger is again on the table. Furthermore, as the FTX clients learned, it can be disastrous…However, as you might think, gold is the exact opposite.”
Jim Cramer, TV Investment Personality.
Cramer looked to the daily chart of the tech-savvy Nasdaq-100 and the bitcoin futures dating back to March 2021 to illustrate the analysis from Carley Garner, senior commodity market strategist and trader at DeCarley Trading.
Thus according to Cramer, Garner noted that the two indices are nearly moving in lockstep, which shows that the stock is a risk asset rather than a stable store of value or a currency.
