The host of Mad Money, Jim Cramer, has some advice for crypto investors. “As long as you recognize the very real possibility that the whole investment case for crypto rests on the greater fool theory, you’ve got my blessing to speculate on it,” he said. Cramer added that he holds ether because he thinks “there could be millions of bigger fools.”
Jim Cramer’s Crypto Investing Advice
The host of the Mad Money show on CNBC, Jim Cramer, talked about crypto investing Thursday. The former hedge fund manager who co-founded Thestreet.com, a financial news and literacy website, said:
As long as you recognize the very real possibility that the whole investment case for crypto rests on the greater fool theory, you’ve got my blessing to speculate on it.
The Biggest Fool theory states that the price of an asset is determined by whether it can be sold for a higher price at a later time. The theory refers to the idea that you can make money purchasing an asset because there is someone out there who eventually is willing to buy it from you at a higher price.
Cramer added, “I know a lot of people say ridiculous things about crypto, and I’ve been criticized a lot for acknowledging it.” However, he pointed out:
At the end of the day, I’ve said repeatedly that you can use bitcoin or ethereum as a hedge against inflation, up to 5% of your savings, as a replacement for gold.
In August, the host of Mad Money recommended placing up to 5% of wallets in cryptocurrencies, saying he believed in crypto. He said in March that gold had let him down.
Cramer further shared: “I didn’t buy bitcoin or ethereum as inflation insurance. In all honesty, I was gambling. I was just betting on crowd psychology, though, and have no idea why these things have gone up except that there are a lot of over-enthusiastic people out there who want to buy high and sell higher. He elaborated:
I’m holding onto my ethereum because I believe there could be millions of greater fools out there. I think that’s a decent bet.
He continued, “I have no particular attachment to Ethereum and will end up ringing the register on the rest of my position when I think it’s over going higher.”
The price of ether hit an all-time high on Friday. At the time of writing, ETH stands at $4,274. It was down 3.5% in the past 24 hours but up 7% in the past seven days and almost 50% in the last 30 days.
In June, Cramer revealed that he had sold almost all of his bitcoin after the Chinese government repeated its crackdown on crypto. In the same month, he said he put money in ETH, noting: “I like ethereum because people actually use it much more to be able to buy things.” In September, the host of Mad Money pleaded with crypto investors to profit if they had any crypto gains due to concerns over Evergrande and Tether.
