Bitcoin: ‘If You Want To Gamble Go To Vegas’ — Jim Cramer
Getting involved into the cryptocurrency space is like gambling, host of CNBC's Mad Money said, adding that people are better off going to Vegas.
“What's the difference between bitcoin and trying to figure out the Super Bowl? I mean it's gambling,” Cramer said on Wednesday. “If you want to gamble, go to Vegas. Vegas is fabulous.”
Bitcoin surged to new highs on Wednesday, approaching $13,800-per-token mark, after just breaching $12,000 earlier in the day for the first time ever. It was last seen trading at $13,762, up 1.87% on the day, according to Kitco’s aggregated charts.
The digital currency’s rise of more than 1000% this year has been unprecedented, prompting many analysts to issue bubble warnings.
“It's kind of like monopoly money,” Cramer added when speaking on Squawk Box. “Obviously, there's people who use it. If you ever say anything bad about it, there's like this 'bitcoin mafia' that comes after you. But it is an oddity that has nothing to do with us [as investors].”
In November, Cramer pointed out that the cryptocurrency’s jump is “parabolic" and it won’t last.
Birinyi Associates also released a report in November, stating that bitcoin’s bubble could be bigger than that of Nasdaq in the late 1990s.
Founder of Birinyi Associates Lazlo Birinyi told CNBC that even though he will trade bitcoin, he would not invest in it, even on a dare. “I would not want to go home with a lot of bitcoin,” he said.
On top of that, analysts at ETF Securities warned that investors looking for a store of value should not consider bitcoin.
“Bitcoin’s limited track-record and high volatility should certainly bring caution to those classifying it as a store of value,” analysts said in November. “Since 2010, Bitcoin’s annualized daily volatility has been 15 times more volatile than the US dollar, 7 times more volatile than the price of gold, and 3 times more volatile than the price of oil.”
Many others agree, including chief market analyst at FX broker AxiTrader James Hughes, who told Reuters last week that “anything that rockets higher, tends to fall down faster when the time comes, and the time will come.”
In the meantime, bitcoin's total market value equals to about $213 billion, which more than doubles Goldman Sachs' market cap.