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Jim Cramer: Crypto Gaining Credibility

But there are alternatives to buying digital coins.

Big fan of cryptocurrency?

Mad Money’s Jim Cramer said on a recent episode of the Mad Money TV show that in all of his years, he's never seen people get excited about stocks the way they get excited about the likes of Bitcoin, Etherium and Dogecoin.

Cramer even admitted to having a "soft spot" for crypto,  going as far as saying investors could have 5% of their speculative portfolios invested in it. 

But he urged those who wish to invest in cryptocurrencies to do it like cold and calculating investors, not fans. 

One need only look at the recent debacle of the "Squid Games" cybercurrency to to see the risks 

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On Real Money, Ed Ponsi discussed a stock he likes as an alternative to directly buying digital coins.

“If you want to play in the crypto sector, one approach is to own shares of the companies that are active in that space,” Ponsi wrote recently on Real Money. “By using stocks, investors can benefit from the surge in activity and interest in crypto while still trading on a regulated exchange." 

Crypto has not only maniacal fans, but critics who think it's all a scam. Crypto has become much better established recently. New York City’s new mayor, Eric Adams, has promised to make NYC more cyber currency friendly:

Cramer says many people misunderstand crypto as an investment. Crypto may have the word "currency" in its name, but in reality, it's a speculative investment, not a currency. When an investor bets on crypto, that's a bet on crowd psychology more than anything else. 

That's why one should not invest as a fan, buying it at any price and holding on forever. Cramer said be smart, buying on the dips and selling into strength, just as one would with another speculative investment that shot up hundreds or thousands of percent overnight.

Get more trading strategies and investing insights from the contributors on Real Money.