Mad Money host Jim Cramer has some advice on how to invest in bitcoin and when is a good time to sell. He said, “I’m a bitcoin believer,” outlining the reasons why he is sold on the cryptocurrency and why people are buying bitcoin instead of gold.
Jim Cramer’s Advice on Investing in Bitcoin
Jim Cramer, the host of Mad Money on CNBC, gave some advice on investing in bitcoin on Wednesday. The former hedge fund manager is also the co-founder of Thestreet.com, a financial news and literacy website.
“People don’t believe in fiat currency anymore,” Cramer began. “People believe that the United States is printing money … But bitcoin is not printing bitcoin. So that’s more valuable in the same way that gold is hard to find. And gold is growing, we find, about 1% more than we had the year before, that’s all … so it has to do with scarcity.”
Emphasizing that “There’s no scarcity of dollars” while “There’s some scarcity of gold,” he contrasted:
There’s total scarcity of bitcoin. When you have something that’s totally scarce in an era where people fear inflation and don’t believe in government bonds and they don’t believe in governments in general, then this bitcoin suddenly has allure.
The Mad Money host further opined: “the more people who give it [bitcoin] a higher price … the more likely it is that there will be more people come in.”
Treating Bitcoin Like Stock, When to Take Profits
Cramer additionally shared: “I sold enough bitcoin yesterday to pay for my initial stake, which is what I would do if it’s a stock. I take out my basis and then I let it run.” He added: “I am not going to look at bitcoin again. I’m fine with bitcoin until it comes all the way back to where I bought it and then I will refigure, maybe buy it again.”
Cramer elaborated: “As I tell people … if you have a double, take a lot out. And I doubled, so I took a lot out. It’s just no different from a stock that I had a double on, with the exception of the fact that this thing [bitcoin] doubled while I was away and that’s too fast for me.” He affirmed, “So now I don’t have to worry. Play with the house’s money. See what happens,” elaborating:
I am regarding bitcoin as a precious stock.
Cramer views bitcoin and gold as insurance, such as against inflation, as he previously explained. “I think that you have to have that kind of insurance,” he said of the two assets. However, the Mad Money host pointed out: “I did not expect that insurance to make me so much money. Typically insurance is not something that makes a lot of money.”
A Twitter user asked him last week, “Are you surprised gold isn’t rallying after this week? Seems like everything that is going on should have been bullish for gold.” Cramer replied, “Either it is not as chaotic out there so gold doesn’t jump or it’s all going to crypto. But remember there has been no flight to quality (treasurys).” Besides saying, “I’m a gold believer,” Cramer said on Thestreet:
I’m a bitcoin believer … I do feel that bitcoin for the moment is doing what gold used to do. What’s interesting is there’s big scarcity of gold but it’s just not acting as it should because I think people are buying bitcoin.
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