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Recently, CNBC’s Mad Money show host Jim Cramer stated that he might invest 1% of his net worth in Bitcoin (BTC). The famous investor compared Bitcoin and gold and mentioned the importance of hedging inflation.
In Anthony Pompliano’s podcast, Cramer stated that he would “try to invest 1% of his net worth in Bitcoin.”
Since the Bitcoin bull market in 2017, CNBC, Bloomberg and institutional analysts have been extremely dissatisfied with digital assets. Most people claim that cryptocurrencies are Ponzi schemes, scams, or unsustainable, but this statement began to change in April 2019, when Bitcoin rebounded from a low of less than $4,000.
Most investors regard safe-haven assets such as gold as a hedge against inflation, but they have not invested in these assets in hopes of obtaining a handsome return.
In an interview with Pompliano, Cramer said that Bitcoin can both appreciate and hedge against inflation, which attracted him. He says:
“I mean, people often say that cryptocurrencies are hacked, do you know what’s really bad? It’s when your kids can’t find your gold. By the way, it’s not uncommon. So , This is why I am obsessed with the need to own my own cryptocurrency, because I am afraid of huge inflation, and I don’t have (any cryptocurrency). Gold will get better, and real estate will get better. These will keep me normal It works. The idea of real money, okay, my goodness, I’ll try it with 1%.”
It’s not just Cramer holding a long position in Bitcoin. Billionaire investors like Paul Tudor Jones and even multi-billion dollar public companies have begun investing in Bitcoin.
On September 16, MicroStrategy CEO Michael Saylor stated that the company currently holds 38,250 BTC. Based on the current price of Bitcoin ($10,800), the total value is $413.1 million. Saylor said:
“On September 14, 2020, MicroStrategy bought 16,796 bitcoins for a total price of US$175 million. To date, we have purchased 38,250 bitcoins for a total purchase price of US$425 million, including fees and expenses. ”
Large companies and well-known investors are increasingly investing in Bitcoin because it can serve as an inflation hedging tool as well as being portable. Over time, the Bitcoin infrastructure and ecosystem have improved exponentially, and this digital asset has also received huge returns.
Some investors believe that Bitcoin has all the characteristics of gold because it is easy to carry and its supply is fixed. In fact, billionaire investor and Gemini Exchange co-founder Tyler Winklevoss believes that Bitcoin can act as gold more than precious metals themselves. Winklevoss said:
“It turns out that Bitcoin has an order of magnitude or 10 times advantage over gold.”
Cramer said gold is dangerous and wants to gain exposure to cryptocurrencies
In the interview, Cramer specifically expressed his concerns about gold storage. He said that gold is dangerous for children, which makes Bitcoin more attractive. Cramer said:
“They (my children) will never understand gold. The reason they never understand gold is because they think gold is dangerous. It’s dangerous because it can be stolen, it’s dangerous because they don’t want to take it out of the bank. , It’s dangerous because they might forget where it is.”