Gold or Crypto: Jim Cramer’s Take on Navigating Economic Turmoil

• The Mad Money host sold all his crypto holdings the previous year.

Jim Cramer, the host of Mad Money, has recommended investors stay away from cryptocurrencies and invest in physical assets like gold if they really want a true hedge against inflation or economic instability. He further stated Bitcoin is too erratic to be used as money.

On Monday, Jim Cramer offered some investment guidance for gold and cryptocurrency. Cramer, a former hedge fund manager, is a co-founder of the financial news and education website Thestreet.com. Despite bitcoin’s recent increases, in his opinion, investors should stay well clear of cryptocurrencies.

Cramer insisted, citing charts read by Carley Garner, senior commodity strategist and options broker at Decarley Trading. He then gave the following advice that Garner recommends sticking with gold if one genuinely wants a real hedge against inflation or economic turmoil and that he agrees with her on that point.

The Mad Money host stated, citing Garner, that daily charts of the two markets dating back to March 2021, show a very strong link between bitcoin futures and the Nasdaq-100, which is heavily weighted toward technology. This shows that bitcoin behaves more like a volatile asset than a reliable store of value or medium of exchange. Carmer argued adding the following details: Think about business owners trying to transact with Google or Facebook shares. They’re too erratic; it’s absurd. Bitcoin is no exception.

Tim Draper, a startup investor and Paul Tudor Jones, a billionaire hedge fund manager, disagree with Cramer and think that bitcoin is a better inflation hedge than gold.

Cramer also issued a warning about counterparty risk, which refers to the chance that the opposite party to a transaction or investment may fail to uphold their end of the bargain. Of course, one could just hold bitcoin in a decentralized wallet directly; this would shield him/her from cryptocurrency risk, Cramer suggested.

The host of Mad Money formerly held investments in non-fungible tokens (NFTs), ether, and bitcoin but he sold all of them last year. He once suggested bitcoin along with gold. He stated in March 2021: “I have been telling you for years that you should have gold but gold let me down. There are too many vicissitudes that affect gold. It is vulnerable to mining problems. In many instances, it could fail, to be honest.”

Additionally, he has repeatedly cautioned investors to leave the cryptocurrency market because the U.S. Securities and Exchange Commission (SEC) may round up non-compliant crypto firms. He further emphasized, “I wouldn’t touch crypto in a million years”.

As a result of gold’s long history as a store of value and the possible risks of investing in the extremely volatile cryptocurrency market, Cramer’s counsel to stay away from cryptocurrencies and stick with gold as a hedge against inflation and economic instability is based on both of these factors. Investors should weigh the possible benefits and drawbacks of both gold and cryptocurrencies, however, and base their choice on their own financial objectives and risk tolerance. In order to avoid putting all of one’s eggs in one basket, it’s vital to diversify one’s portfolio. Before making any investing decisions, it is always wise to get the advice of a financial expert.

Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.

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