Alex Dovbnya
Jim Cramer has thrown cold water on the recent Bitcoin rally, urging investors to dump it for gold
Despite Bitcoin’s massive surge this month, CNBC’s Jim Cramer cautioned against entering the crypto space on Monday.
Referring to Carley Garner, senior commodity market strategist and broker at DeCarley Trading, Cramer warned investors to steer clear of cryptocurrencies and instead opt for gold as a hedge against inflation or economic chaos.
Garner had been looking at the daily chart of bitcoin futures and the tech-heavy Nasdaq-100 since March 2021 and noted that they are trading almost in lockstep. This suggests that Bitcoin is more of a risk asset, not a store of value.
Therefore, Cramer sees the shiny metal as a much better alternative compared to the world’s largest cryptocurrency.
The TV host also highlighted the counterparty risks associated with the flagship cryptocurrency amid the FTX drama.
As reported by U.Today, Bernstein has seen a sharp rise as a result of “mean reversion,” an investment phenomenon observed when assets priced too far from their typical values tend to revert to their average price over time . By that logic, Bitcoin is valued higher right now as the cryptocurrency’s value has fallen significantly since its all-time highs in late December and January last year, creating an anomaly.
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