Bitcoin isn't really an investment, it's just a gamble for most people -- and a "refuge" for those who live in countries like Venezuela that have shaky currencies, Jim Cramer says.
"If you're in a country that is falling apart, it is a refuge. If you're anybody else [and] it's not a refuge for you, it's a gamble -- [and] I'm not about gambling," Cramer said during his latest private conference call with members of his Action Alerts PLUS club for investors.
Cramer said investing in bitcoin -- which started the year below $1,000 but briefly hit $19,000 this past week -- is little better than playing blackjack because there's no logic behind its price moves.
"No one's been able to tell me why it should go up or down," he said. "That's like playing cards."
In fact, Cramer sees only three non-speculating types of bitcoin buyers:
- People Stuck in Bad Economies. The expert said many recent bitcoin buyers come from Venezuela, which has a collapsing economy and currency controls that generally prevent moving cash out of the country. "In failing countries, the last thing you want to do is own the [local] currency," Cramer said.
- Sneaky Hedge Funds. He said some hedge funds are trading bitcoin in a bid to "corner the market."
- Crooks. "If you're a hacker and you want to be paid for a ransomware, you do it with bitcoin," Cramer said.
He added that you shouldn't buy chipmakers Nvidia (NVDA) - Get Report , Advanced Micro Devices (AMD) - Get Report or payment-processing firm Square (SQ) - Get Report just to play the bitcoin craze. Cramer said that while such stocks have a tie to the industry, "it's just very small."
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