CNBC’s Jim Cramer on Tuesday defended his stance on cryptocurrency, saying he endorses owning some as a hedge against government spending and a ballooning deficit, as “national debt worries are never going to go away.”
“I’ve liked crypto for a very long time, mostly because I know there’s a huge constituency of investors who want to buy something that can protect them from our government’s busted budget,” he said. “While there’s no proof crypto can protect you from anything — at least not yet — it’s a plausible story…Let’s just say sometimes that’s all you need in this business.”
Some on Wall Street believe that due to cryptocurrency’s fixed supply, it will be a solid asset in the event that continued excessive federal spending — and a widening U.S. national debt — devalues the dollar. Cramer said the hedging argument makes sense to him. However, he acknowledged that cryptocurrency is also fairly new and doesn’t yet have a proven track record.
Cramer expressed skepticism that the government will be able to solve the debt issue any time soon. Legislators may have the ability to balance the budget he said, but they “lack the political will to do things that are unpopular.” Solving the problem, he said, means making difficult decisions to raise taxes or cut spending. He continued, saying that many politicians are inclined to leave the issue for their successors.
“I think bitcoin, ethereum and maybe even some other cryptocurrencies deserve a spot in your portfolio, too,” Cramer said. “Maybe, one day, if the deficit gets under control, I’ll change my tune.”
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