Jim Cramer believes crypto should be part of a diversification strategy as to how people should invest in it. Since he owns Ethereum himself, Jim says he can’t discourage people from buying crypto. This makes a lot of sense as most influencers don’t often put their money where their mouth is. Take Warren Buffett for an example. He constantly criticizes Bitcoin but invests in crypto-friendly companies such as NuBank. I don’t think it’s a coincidence.
Jim on crypto investing
He was recently on CNBC, where he shared his views on cryptocurrency investing. Firstly, he said that it should be part of a diversification strategy. In simpler words, it means crypto should not be your total portfolio but rather only a part of it. Now, you might ask how much? That will depend on your risk appetite. For example, Jim advises putting 5% of your money into crypto and 5% into Gold. However, as a young investor, one might be inclined to take more risk and invest 10% or even 20% of their portfolio in crypto.
The idea is if tomorrow’s crypto goes to zero, it shouldn’t drastically affect your livelihood. Jim also explained why he bought Ethereum. His real goal was to purchase an NFT for donation purposes, but he couldn’t do it with the dollar. So, he had to buy Ethereum, which he researched first and liked its qualities and ultimately bought it.
However, Jim believes that crypto is speculative, and one must also admit that it is. Investing in speculative assets is not wrong, but one cannot put it in the same category as Apple or Coca-Cola. Ultimately, he says it’s best to go with BTC and ETH as they have the largest following, but one should not borrow money to buy crypto, which is a given for most people. Though, it’s good that Jim put it out there.
Who is Jim Cramer?
Jim Cramer is an author and television personality from the United States, the host of CNBC’s Mad Money, and a reporter for Squawk on the Street. He was also a hedge fund manager, the founder of Cramer Berkowitz, and a senior partner. Jim has even written several books, including Confessions of a Street Addict (2002) and Jim Cramer’s Real Money: Sane Investing in an Insane World (2005).
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