On Wednesday (June 8), former hedge fund manager Jim Cramer shared his latest thoughts on crypto and in particular how it should be viewed by investors.
Cramer is the host of CNBC show “Mad Money w/ Jim Cramer“. He is also a co-anchor of CNBC’s “Squawk on the Street“, as well as a co-founder of financial news website TheStreet.
“If you’re a young person and you’re thinking about crypto, I think it’s smart.
“I think crypto should be part of a person’s diversified portfolio. I can’t tell you not to own crypto. I own crypto: I own Ethereum. Why did I buy Ethereum? Because I was in a bidding auction for charity to buy what was known as an NFT, and they wouldn’t let me do dollars. I had to buy it in Ethereum.
“So I researched it, and I said, ‘well, you know, got some qualities I like — scarcity, value — not as hot, so to speak, as Bitcoin. So, I bought it. These are hope securities. Now I don’t like hope. I think you should not ever invest on hope, but these are speculative, and one of the things that I teach in my classrooms is it’s okay to own something that’s speculative.
“You must admit that it’s speculative. So, you don’t put it in the Procter & Gamble class, [it’s] not Coca-Cola, it’s not Apple, but I suggest and accept speculation. Now, when I started Mad Money, I said, ‘I think you should own a spec and I think you should own a gold stock’.
“And ever since crypto came along, I have said that instead of, say, 10% being gold, 5% should be gold and 5% should be crypto. What do I think is the value of crypto? I have no idea. Here’s what I know you’re thinking, though. You’re thinking ‘I have seen fortunes made in crypto and I want a shot at making a fortune’.
“And unlike many of the so-called graybeards who come on TV, I agree with you. You have every right to try to make some money in crypto. I would prefer that you would do it in Ethereum or Bitcoin, which have the largest following, seem like they’re the most legitimate. I would be careful not to borrow money as many people do own these because these are speculative…
“Bitcoin can’t live your house. It’s not a mortgage. It’s a piece of paper, or in this case, it’s not even a piece of paper. So, I don’t want any borrowing. Borrow for your house, borrow for your car, but don’t borrow for crypto, but I would never discourage you from buying crypto because of all the fortunes that have been made and how it could make a whole new group of people fortunes. I’d like that to be you.“
Here’s how Cramer got into crypto.
On 10 September 2020, Anthony Pompliano (aka “Pomp”), who is the host of “The Pomp Podcast”, told his almost 370K followers on Twitter that he had managed to convince Cramer to buy some Bitcoin (apparently during a recent podcast interview with Cramer).
Then on 11 December 2020, Cramer told Katherine Ross, a correspondent for TheStreet, that he had just bought more Bitcoin.
Three months later, during a second interview appearance on Pomp’s podcast, Cramer said that he had made “a ton of money” from his Bitcoin investment, expressed his disappointment with gold, and mentioned that he was advising people to have 5% of their portfolio in gold, and 5% of it in Bitcoin.
On 15 April 2021, Cramer revealed, while talking to CNBC’s “Squawk on the Street” co-host David Faber, that as the Bitcoin price has been going up over the past few months, he had been taking profits by selling some of his BTC holdings.
On 21 June 2021, during an appearance on CNBC’s “Squawk on the Street”, Cramer revealed that he had sold most of his remaining Bitcoin holdings due mostly to concerns over the crypto crackdown in China and Bitcoin’s use for ransomeware payments.
And on 28 June 2021, Cramer said on CNBC’s “Squawk Box” that he had added to his $ETH holdings.
