The financial analyst Jim Cramer supported the ownership of cryptocurrencies as Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) as a hedge against excessive government spending and a widening deficit.
What happened: Cramer defended his pro-Cryptocurrency stance, stating that concerns about the national debt are perpetual, CNBC reported on Tuesday.
“I think Bitcoin, Ethereum and maybe some other cryptocurrencies deserve a place in your portfolio as well,” said the host of CNBC’s popular Mad Money show. “Maybe one day, if the deficit is controlled, I will change my mind.”
Despite the lack of evidence that cryptocurrencies can protect against financial risks, Cramer believed it was a “plausible” narrative.
“I’ve liked cryptocurrencies for a long time, mostly because I know there are a lot of investors who want to buy something that will protect them from our government’s destroyed budget,” Cramer said.
He added that although cryptocurrencies are relatively new and lack a proven track record, they could serve as a solid asset if the US national debt continues to devalue the dollar due to excessive federal spending.
Cramer expressed doubt that the government will be able to address the debt problem in the near future.
Why is it important: The United States’ federal debt has surpassed $35 trillion in 2024, calling into question its long-term financial stability. In 2024, the government has spent $6.75 billion, leaving the country with a deficit of $1.83 billion in just one year.
Citing the federal debt crisis, the world’s largest asset manager BlackRock strategically advocated for Bitcoin as a possible hedge against future events affecting the US dollar.
Meanwhile, Cramer has been beefing up his defense of cryptocurrencies. Last week, he revealed that he owns Bitcoin and called it a “clear winner.”
However, since its bullish stance, the leading cryptocurrency, which was approaching $100,000, has retreated to $92,000.
For the uninitiated, the “Cramer Inverse” phenomenon is based on the belief that doing the opposite of what Cramer advises could lead to profits. Although there is no definitive evidence that countering Cramer’s predictions is a profitable strategy.
Price Action: At the time of writing, Bitcoin was trading at $92,420.98, down 1.98% in the last 24 hours, according to data from Benzinga Pro.
Photo by s_bukley on Shutterstock
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