The Insightful Perspective of Jim Cramer
Understanding Bitcoin’s Momentum BTC/USD surged past the $67,000 mark since 2021 on Monday, marking another chapter in its relentless upswing over the past half-year. Jim Cramer from CNBC detects the driving force behind the surge.
Exploring the Catalysts: Bitcoin’s recent soaring prices, approaching the record levels set in November 2021, have been credited to heightened demand following the approval of spot Bitcoin ETFs, combined with expectations surrounding the upcoming April halving event. However, Cramer offers an alternative perspective on the surge.
“I initially attributed Bitcoin’s climb to the ETFs,” Cramer remarked during a segment on CNBC’s “Squawk On The Street” on Monday.
“It seems people are expressing a lack of trust in the fiat currencies.”
Cramer posits that Bitcoin is now being leveraged as a diversification tactic against the U.S. dollar and other fiat currencies, which don’t possess intrinsic value due to the absence of tangible asset backing, as seen with gold.
The U.S. severed ties with the gold standard in 1971, resulting in a significant decline of about 98% in the purchasing power of the dollar over the past 52 years.
Recently, BofA’s analyst Michael Harnett correlated Bitcoin’s upsurge with the escalating U.S. debt. He pointed out that the national debt of the U.S. is gaining by approximately $1 trillion every 100 days, poised to surpass $35 trillion by April.
Discover More: Gold, Bitcoin Rally: Is US Debt Surge A Key Driver?
Given the capped total supply of Bitcoin at 21 million, many view it as a safeguard against the continuous devaluation of the U.S. dollar and other fiat currencies.
“Younger generations believe that the only way to rectify this is through reflation, inflation, essentially making payments with depreciated dollars,” suggested Cramer.
Cramer’s sentiments on Bitcoin and the broader crypto landscape have fluctuated in recent years. He entered the Bitcoin market in early 2021 but divested near its peak before the industry confronted various challenges, including the upheaval at the crypto exchange FTX.
Maintaining a cautious stance on crypto since then, Cramer’s recent remarks indicate a potential reconsideration of the sector. Last week, he hinted that Ethereum ETH/USD could experience upward momentum from current levels. On Monday, he suggested that the approval of Ethereum ETFs in the future will ignite another crypto rally.
“Initially, I believed that the ETF was driving most of this … There is an Ethereum ETF on the horizon, and investors should brace themselves,” said Cramer.
Further Read: Is Jim Cramer Getting Bullish On Crypto? Why He Says Ethereum Can ‘Only Go Up’ From Here
$BTC Price Update: Bitcoin showed a 6.02% gain over a 24-hour period, priced at $66,644 at the time of writing, according to Benzinga Pro.
Image Source: Eivind Pedersen from Pixabay.