Jim Cramer is a true believer in crypto. Having recently purchased Ethereum, he now feels the growing world of digital currencies is getting bigger than anyone could have imagined, and he’s worried people are going to miss out. He recommends getting involved in the space while also considering the risks.
Jim Cramer Says There Are Good Things About Crypto
Right now, Cramer fully admits the space is rather speculative. Thus, he only recommends moving about five percent of your portfolio into crypto. He commented in a recent interview:
I can’t tell you not to own crypto. I own Ethereum.
The purchase of Ethereum came about through some unforeseen circumstances. Cramer initially wanted to take part in a bid surrounding a new non-fungible token (NFT). However, he tried to become involved by offering cash, which the overseers wouldn’t allow. He had to purchase Ethereum to take part in the event, and he’s held onto some of it ever since. He commented:
They wouldn’t let me do dollars. I had to buy it in Ethereum, so I researched it and it’s got some qualities I like.
Continuing his interview, he commented that he thinks both Ethereum and bitcoin are the best digital currencies out there. He is confident that each of these assets will go a long way in the coming future and likely outlive the many altcoins that continue to be added to the crypto arena on a regular basis.
One of the things that he likes about crypto is that it’s very timely. He says many people are looking for a new financial system that keeps them safe and clear from traditional monetary institutions that have too much say in what you do with your own money.
He also said that crypto gives people opportunities to take advantage of short-term gains. Assets ultimately swing north and gain quite a bit of momentum. During that time, people can cash out and make a fair amount of money in the process. However, he mentioned:
You must admit that it’s speculative.
He says if you’re not going to acknowledge the risks of the space and keep yourself safe while trading, there is no point in getting involved. He pointed to the recent crash that’s occurred to highlight his concerns about the dangers of trading. Bitcoin, for example, is seriously down from its all-time high of $68,000 per unit last November. The asset has since lost close to $40,000 and is now trading in the low $30,000 range.
Don’t Borrow to Buy More
He also says that borrowing money to add to your crypto stash is a huge mistake. He stated:
Borrow for your house, borrow for your car, but don’t borrow for crypto.
He further said that crypto assets should not be placed on the same plane as long-term safer investments like blue-chip stocks.