By
Steve Muchoki
April 24th, 2024
Cramer is also one of the analysts that put his money where his mouth is and holds a significant amount of Bitcoin and Ethereum.
Jim Cramer, a CNBC host, and famous stock picker has shared his new thoughts about crypto, noting among many things that investors should not treat the new asset class as safe investments.
“It’s not Coca-Cola, it’s not Apple,” Cramer said, a statement that implied the major American stocks are more reliable than digital currencies.
As bullish as Cramer is about cryptocurrency, particularly Bitcoin (BTC), Cramer advocates that investors should not invest a large portion of their portfolio into the new asset. Specifically, Cramer advocates that just about 5% is enough to allocate to crypto and that investors should not for any reason borrow money to take a position in the digital currency space.
While there are at least 19,000 cryptocurrencies, Jim Cramer only believes in BTC and Ethereum (ETH) as the most legitimate of all. While many investors are already warming up to the memecoins like Dogecoin (DOGE), Cramer has always criticized the coin, and back in January, he suggested that the digital currency could be an unregistered security.
Digital currencies are already gaining widespread recognition today, and Cramer is optimistic that the asset class will attain a more mainstream embrace in the near future. His interests in Ethereum are particularly natural as he sees the coin as one with a very crucial utility with the advent and proliferation of Non-Fungible Tokens (NFT).
Cramer comes off as one of the most consistent Wall Street voices that share insight about the emerging cryptocurrency ecosystem. His stance that investors should not allocate more than 5% to purchasing the asset class dates back to August 2018 as reported by Coinspeaker at the time.
Cramer is also one of the analysts that put his money where his mouth is and holds a significant amount of Bitcoin and Ethereum.
Crypto Rule by Jim Cramer Not Applicable to All
Jim Cramer may be correct about some of his claims, and adhering to them can be a very good way to stay relatively safe, seeing the digital currency ecosystem is very volatile.
However, the rules are being blatantly defied by big investors like business intelligence and software firm, MicroStrategy Incorporated (NASDAQ: MSTR) which invests far more than 5% of its portfolio into Bitcoin.
MicroStrategy currently holds as much as 129,218 Bitcoin units, an effect of consistent accumulation since August 2020. As a blatant exception to Jim Cramer’s recent stance about borrowing to invest in Bitcoin, MicroStrategy currently has an active loan worth $250 million which was secured from Silvergate Bank and collateralized with BTC.
While Cramer’s advice is not to a particular investor or entity, what has been glaring in the crypto investing world is that everyone taking a stake in the space has their own strategy at time.