Jim Cramer says that it is “Almost Irresponsible for firms not to buy bitcoin.”
After Tesla’s $1.5 billion bitcoin purchase and MicroStrategy’s evolving $3.2 billion positions, the “Mad Money” host says that more firms need to get onboard.
MicroStrategy CEO Michael Saylor recently anticipated that there will be an “avalanche of companies” adding Bitcoin to their balance sheets, and Tesla’s announcement yesterday of a $1.5 billion purchase lent confidence to that idea. And now CNBC’s Jim Cramer suggests that it will be a bad idea for businesses to not get on board with Bitcoin.
The host of CNBC’s “Mad Money” and founder of TheStreet.com, appeared on the network’s “Squawk Box” show today to share his views on businesses buying up Bitcoin as a reserve asset instead of holding onto fiat currency.
“As far as a way to have a pastiche of things you should do your cash with, I’m all for it. I think it’s almost irresponsible not to include it,” he stated. “Every treasurer should be going to their boards of directors and saying, ‘Should we put a small portion of our cash in Bitcoin?’ It seems to be an interesting way to hedge against the rest of the environment. [It’s a] nice hedge against fiat currency.”
Cramer supported his advice, saying that he doesn’t believe that “companies shall invest big” in Bitcoin and that it must only be a “piece of a puzzle.” He called himself more “traditional” when it comes to hedge options, like buying gold or selling calls against the stock, however, he still advised that Bitcoin shall be a part of a mix of assets for companies.
“I happen to think that Bitcoin is exciting. It’s something that we can talk about endlessly. There are promoters of it; there don’t seem to be a lot of sellers of it. We’re gonna hear from PayPal in an analysts’ meeting coming up about how it’s begun to be mainstream,” he said. “I just think that in the end, you need to have some kind of hedge on it, because if you take it and it goes down, I think that you’re going to end up saying, ‘Why did I use Bitcoin when I could actually transact in dollars?’”
Tesla’s $1.5 billion Bitcoin purchase triggered a nearly 20% jump in the price of Bitcoin yesterday, recording a new all-time high above $48,000 overnight. Business intelligence firm MicroStrategy was the first remarkable example of a company that invests large amounts of money into Bitcoin as a reserve asset, beginning at a $250 million initial purchase in August 2020.
MicroStrategy continued to add to that tally ever since then, spending $1.145 billion total on 71,079 BTC, which is now amounting to approximately $3.32 billion as of this writing. The firm’s stock price has also multiplied many times since the initial BTC purchase.
With one of the world’s most valuable companies that are following suit in Tesla, Cramer is onboard with the idea of more and more firms joining the party. And Cramer also holds Bitcoin, as he elaborated back in December. He asserted that position today during his appearance on CNBC.
“I own Bitcoin. I’ve owned Bitcoin for some time as an alternative. I used to always say, I own some gold and own some cash. Now I say I own some cash, own some gold, and own some Bitcoin,” he stated this morning. “It’s an alternative to a cash position where you make absolutely nothing.”
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