Jim Cramer Advises Investing In Gold Rather Than Crypto
On 23rd January 2023, the globally popular host of ‘Mad Money’, Jim Cramer, was seen advising investors where to put their money.
While addressing investors, Cramer suggested that they should immediately put their money into Gold. He strictly advised them also not to engage with cryptocurrencies for the time being.
Cramer is held in high steam amongst the global business community. He became famous when he joined the stage through a tv program called “Mad Money”.
Prior to hosting the show, and even to date, he is known to be a huge investor. His professional experience includes managing hedge funds at several high-profile AUM firms.
He is also associated with an online financial news agency namely ‘Thestreet.com’ which was personally founded by him.
Cramer Disregards Recent Bitcoin Gains
Cramer is a well-informed person who knows what is happening in conventional markets as well as in digital asset markets.
The gains that the leading cryptocurrencies namely Bitcoin and Ethereum, have been making currently are also on his notice. Despite the gains, Cramer disregarded the progress of Bitcoin and Ethereum from the start of 2023.
In his advice to investors, he specially made a mention of Bitcoin to suggest that investors must avoid investing in Bitcoins.
He said specifically that ‘though Bitcoin’s value is surging these days, yet the cheerleaders must ensure their distance’.
Cramer opined that investors must focus on ‘real hedge’ if they want to avoid the consequences of economic crunch and inflation. He suggested that currently, Gold is a real hedge and that investors must consider it seriously.
For supporting his argument in favor of Gold, he also referred to Carley Garner’s analysis i.e. lead commodity strategist at Decarley Tradings.
In her analysis, Garner noted Bitcoin gains and proceeded to opine that investors be cautious. She also recommended sticking with Gold and avoiding cryptocurrencies, particularly Bitcoin.
Garner’s Explanation
Instead of sending his advice in the air, Cramer opted to give an explanation behind his argument for investing in Gold.
He emphasized that there is a deep-rooted connection between NASDAQ-100’s tech giants and Bitcoin futures.
He then pointed out the chart which suggested that Bitcoin is not a commendable ‘store of value’. Instead, it is more of a ‘risky asset’ where the volatility is exorbitantly high.
Cramer then gave the example of Google. He said that it would be absurd if people use shares pertaining to Google and start executing their transactions through them.
Cramer’s Opponents
Though Cramer seems to be taking the side of Gold, however, there were a lot of people who sided with Bitcoin.
There are a whole lot of Bitcoin communities that believe that there is no hedge that is as real as Bitcoin. They even disregard Gold to be a better hedge as compared to Bitcoin.
For instance, Tim Draper of Paul Tudor Jones firmly believes Bitcoin is the best one can find as a ‘genuine hedger’.
However, Cramer then started talking about the third-party risk in crypto trading. He said that in Bitcoin trading, third-party risk is always there. The possibility of a third party not fulfilling its obligations cannot be ousted, claimed Cramer.
Cramer hence also acknowledged that this third-party risk is removed when a Bitcoin purchaser keeps the coin in the decentralized wallet.
However, if a purchaser buys a Bitcoin and puts it in a centralized wallet, then risk emerges automatically, advised Cramer.
Indirectly, Cramer was pointing at FTX which being the centralized firm subsequently collapsed and left its customers empty-handed.
Lesson Learnt By Cramer
Cramer used to spend his money on acquiring top digital currencies as well as other digital assets like Non-Fungible Tokens.
It was in March 2021, when he even went on to say that he lost his confidence in Gold and that Gold had failed him miserably.
Thereafter, when crypto winter came, he remarked that he would never ever go near either Bitcoin or any given cryptocurrencies.
