Financial expert and the host of Mad Money on CNBC, Jim Cramer, warned investors to steer clear of the volatile world of crypto and instead focus on gold’s tried and true safety. Despite Bitcoin’s (BTC) recent rally, reaching as high as $23,282.35, Cramer argues that the digital currency is too risky to be considered a stable store of value.
Cramer drew on the analysis of Carley Garner, a senior commodity market strategist and broker at DeCarley Trading, who pointed out that “the daily chart of Bitcoin futures and the tech-heavy Nasdaq-100” have been trading in lockstep since March 2021. It suggests that Bitcoin is more of a risk asset than a currency or reliable store of value, according to Cramer.
Cramer stated that the reason for the similarity in trading patterns between the two indexes is the potential for “counterparty risk” – the chance that one party involved in an investment or transaction may not follow through with their end of the agreement.
He added that while one could own bitcoin directly in a decentralized wallet to protect against counterparty risk, the risk is still present if one ever wants to use it for something. In contrast, gold is seen as a much safer option.
Cramer said in the interview:
The charts, as interpreted by Carley Garner, suggest you need to ignore the crypto cheerleaders now that bitcoin’s bouncing. And if you seriously want a real hedge against inflation or economic chaos, she says you should stick with gold. And I agree.
Furthermore, Cramer acknowledged that owning Bitcoin directly in a decentralized wallet can safeguard against counterparty risk, but if the intention is to use it for anything, the risk re-emerges, and as seen with FTX’s customers, it can have severe consequences. In contrast, he noted that the opposite is true for gold.
Bitcoin Price Review
The crypto market is buzzing once again as BTC reaches new heights not seen since August, as reported by TronWeekly. According to data from CoinMarketCap, the world’s most popular digital currency has soared past the $23,000 mark, marking the first time it has reached this level in nearly five months. However, the market sentiment is bullish, and many investors are optimistic about the future of Bitcoin.
As of the latest data, BTC is currently trading at $22,941.10, with an increase of about 0.5% on a daily basis and 8% in the weekly chart. Additionally, BTC trading volume is also up by 13.55% in the past 24 hours.