Jim Cramer believes the crypto market is full of "greater fools" as he compared his investment in the asset class to gambling.
The American TV personality Jim Cramer advised crypto investors to beware of the risks related to the digital asset industry. According to him, investments in bitcoin and the altcoins rests on the “greater fool theory,” where speculation is not absent.
Furthermore, Cramer admitted he is not a crypto hodler because of inflationary reasons, instead, he was “simply gambling.”
‘There Could Be Millions of Greater Fools out There’
CNBC’s Jim Cramer shared yet another controversial stance on cryptocurrencies and the people who operate with them. He believes the industry is associated with the “greater fool theory.” At its core, this concept refers to the idea that one can make money by purchasing an asset and later selling it as there is always someone to buy it at a higher price.
Cramer vowed to keep his crypto holdings as he thinks there are “millions of greater fools out there.” Following the Chinese crackdown on digital asset trading and mining this summer, he sold almost all his Bitcoin stash, leaving him exposure mainly to Ethereum.
However, the American said he is not a keen proponent of the second-largest cryptocurrency either and even admitted he will sell his positions when the price of the asset increases. Keeping in mind that Ethereum hit an ATH today, it seems like Cramer believes its USD value could continue its rally in the future:
“I don’t have any particular attachment to Ethereum and eventually I’ll ring the register on the rest of my position when I think it’s done going higher.”
Cramer put his name next to those who see the asset class as a hedge against inflation. Still, he said his reason to enter the crypto market is not related to it as he was instead gambling:
“I didn’t buy bitcoin or Ethereum as inflation insurance. In all honesty, I was gambling. I was simply gambling on crowd psychology, though, and I have no idea whatsoever why these things went up.”
Jim Cramer. Source: CNBC
Cramer’s Crypto Advice
Towards the end of September, the Evergrande debt crisis in China caused severe disruption in financial fields, including the digital asset sector where the prices of the leading cryptocurrencies plunged hard.
Shortly after that event, Cramer advised individuals sitting on unrealized gains from their investments to take “something off the table” as the Evergrande saga will keep harming the crypto markets in the months to follow.
Taking a closer look at what happened in October, though, it seems like all the stubborn hodlers who did not listen to his guidance have made the right decision.
The first-ever SEC-approved futures-backed Bitcoin ETF in the USA, among many other factors, drove BTC’s price to a new all-time high of nearly $67,000, while ETH reached its peak today at $4,400.
Dimitar got interested in cryptocurrencies back in 2018 amid the prolonged bear market. His biggest passion in the field is Bitcoin and he was fascinated with its journey. With a flair for producing high-quality content, he started covering the cryptocurrency space in late 2018. His hobby is football.
