CNBC’s Jim Cramer, the man who said two years ago that Bitcoin was “like an outlaw currency”, says that thanks to the massive amount of money printing by the Federal Reserve this year, he now thinks that buying Bitcoin is “prudent”.
Former hedge fund manager Cramer is the host of CNBC show “Mad Money w/ Jim Cramer“. He is also a co-anchor of CNBC’s “Squawk on the Street“, as well as a co-founder of financial news website TheStreet.
Cramer expressed his thoughts about gold and Bitcoin during an interview he had last Thursday (September 10) with Anthony Pompliano (aka “Pomp”), a co-founder of crypto-focused asset management firm Morgan Creek Digital Assets, for episode #383 of latter’s podcast (“The Pomp Podcast“), which was released yesterday (September 14).
On 7 June 2017, when Bitcoin was trading around $2,800, after being told on “Squawk on the Street” that Business Insider CEO Henry Blodget had predicted that Bitcoin would one day be worth $1 million, this is how Cramer responded:
I think it [Bitcoin] could [reach $1 million] because the European banks are frantically trying to buy them so they can pay off ransomware. It’s a short-term way to be able to deal with cybersecurity. It is the way to pay off the bad guys.
However, on 14 August 2018, at a time when Bitcoin had just fallen below the $6K level, we found out that Cramer had gone from being super bullish to bearish:
I think the tide has turned against it… I’m not saying its time has passed, but there is a notion that the sun seems to be setting.
Well, in last Thursday’s interview with Pomp, Cramer seemed to have changed his mind about Bitcoin.
Essentially, what Cramer said during the interview was that up until now, in addition to stocks, he had invested in gold, real estate, and rare art (“masterpieces”) as alternative stores of value in order to protect his wealth against inflation, but even he has been a huge fan of gold (in which roughly 10% of his net worth is invested) all of his life, he is concerned that his children will not understand in the future why he did not invest in Bitcoin (which many people in the crypto community think of as “digital gold”).
Cramer also mentioned that the main reasons he did not invest any money in Bitcoin were his lack of understanding and his fear of loss (e.g. in case Bitcoin got hacked somehow).
Pomp explained to Cramer that although many Bitcoiners consider directly buying Bitcoin and controlling your private keys the best way to buy and own Bitcoin, for Cramer, who wants to just dip his toes in the water for now, buying Bitcoin either via Grayscale Investments’ “Grayscale Bitcoin Trust” (GBTC) or via a well-known asset manager such as Fidelity Investments (which already manages a major portion of Cramer’s wealth) might be easier/better options.
Near the end of the interview, Cramer explained that thanks to the trillions of dollars printed by the Fed this year in a bid to stop the U.S. economy from going into a depression (as a result of the devastating impact of the current COVID-19 pandemic), everything has changed now, and for the first time he views buying Bitcoin as an inflation hedge a “prudent” investment since it acts like gold as an inflation hedge but it also can appreciate greatly in value:
“We can’t pay [back the debt]. We just can’t. So, what do you do? You can go overseas — that’s not my plan — or you can hedge.
“I’ve got the hedge on one side, but I don’t have appreciation of hedge…
“I’m thinking down 10 years… the moment I make that move, my kids won’t be able to touch this until 2030…
“I’m going to buy it [Bitcoin] in stages…
“If you know you are not going to be able to touch something until 203, and it’s cash, well, that cash, believe me, is not going to be worth what you think it is…
“The three trillion dollars that we printed changed everything that I believe in…
“I am concerned that I am not being prudent, and I now think that Bitcoin is prudent.”
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.