Mad Money host Jim Cramer has some advice on how to invest in bitcoin and when is a good time to sell. He said, â€œIâ€™m a bitcoin believer,â€� outlining the reasons why he is sold on the cryptocurrency and why people are buying bitcoin instead of gold.
Jim Cramerâ€™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.
â€œPeople donâ€™t believe in fiat currency anymore,â€� Cramer began. â€œPeople believe that the United States is printing money â€¦ But bitcoin is not printing bitcoin. So thatâ€™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, thatâ€™s all â€¦ so it has to do with scarcity.â€�
Emphasizing that â€œThereâ€™s no scarcity of dollarsâ€� while â€œThereâ€™s some scarcity of gold,â€� he contrasted:
Thereâ€™s total scarcity of bitcoin. When you have something thatâ€™s totally scarce in an era where people fear inflation and donâ€™t believe in government bonds and they donâ€™t believe in governments in general, then this bitcoin suddenly has allure.
The Mad Money host further opined: â€œthe more people who give it [bitcoin] a higher price â€¦ the more likely it is that there will be more people come in.â€�
Treating Bitcoin Like Stock, When to Take Profits
Cramer additionally shared: â€œI sold enough bitcoin yesterday to pay for my initial stake, which is what I would do if itâ€™s a stock. I take out my basis and then I let it run.â€� He added: â€œI am not going to look at bitcoin again. Iâ€™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.â€�
Cramer elaborated: â€œAs I tell people â€¦ if you have a double, take a lot out. And I doubled, so I took a lot out. Itâ€™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 thatâ€™s too fast for me.â€� He affirmed, â€œSo now I donâ€™t have to worry. Play with the houseâ€™s money. See what happens,â€� elaborating:
I am regarding bitcoin as a precious stock.
Buying Bitcoin as Insurance, Comparing Bitcoin to Gold
Cramer views bitcoin and gold as insurance, such as against inflation, as he previously explained. â€œI think that you have to have that kind of insurance,â€� he said of the two assets. However, the Mad Money host pointed out: â€œI did not expect that insurance to make me so much money. Typically insurance is not something that makes a lot of money.â€�
A Twitter user asked him last week, â€œAre you surprised gold isnâ€™t rallying after this week? Seems like everything that is going on should have been bullish for gold.â€� Cramer replied, â€œEither it is not as chaotic out there so gold doesnâ€™t jump or itâ€™s all going to crypto. But remember there has been no flight to quality (treasurys).â€� Besides saying, â€œIâ€™m a gold believer,â€� Cramer said on Thestreet:
Iâ€™m a bitcoin believer â€¦ I do feel that bitcoin for the moment is doing what gold used to do. Whatâ€™s interesting is thereâ€™s big scarcity of gold but itâ€™s just not acting as it should because I think people are buying bitcoin.
What do you think of Jim Cramerâ€™s bitcoin investment strategy? Let us know in the comments section below.
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