Jim Cramer, former hedge fund manager and the host of the CNBC show “Mad Money w/ Jim Cramer”, has recently aired his opinion regarding the current situation in the crypto market.
In a recent conversation with Joe Kernen, a co-anchor of CNBC’s “Squawk Box”, Cramer, who also co-founded financial news website TheStreet, pointed out that the implosion of the crypto market may continue.
Jim Cramer noted:
“Right now, it looks like everything’s bad, and I’m not gonna deny that every asset class is getting hurt. The one I’m most interested in is crypto. There are a lot of people in crypto. Crypto really does seem to be imploding but of course we [went] from three trillion to one trillion. Why should it stop at one trillion?
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“There’s no real value there. I mean, you look at these companies… There’s these companies that you never heard of and they blew up the weekend, and you jsay to yourself ‘holy cow! there’s six hundred million dollars just going down the drain’, and we had Gary Gensler, the [SEC] Chairman, on a few weeks ago, he just said ‘look, anybody who has a come hither rate of investment… the rate that you earn… you can kind of forget about it’, and that’s what’s happening. How many places can Sam Bankman-Fried save?”
The recent comment came a few weeks after Cramer posited that young persons who are part of the crypto industry are smart.
“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.
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“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’.
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“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.”
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