Bitcoin BTC/USD surged past the $67,000 mark, a level unseen since 2021, marking another milestone in its relentless upward trajectory over the past six months. Renowned CNBC personality Jim Cramer believes he has unraveled the enigma propelling the ascent of the world’s largest cryptocurrency.
The Driving Force Behind Bitcoin’s Meteoric Rise
Understanding the Surge: Bitcoin’s recent price surge, approaching its all-time highs from November 2021, has been commonly attributed to the growing demand fueled by the approval of spot Bitcoin exchange-traded funds (ETFs) and the anticipation surrounding the upcoming halving event in April. However, Jim Cramer ventures beyond conventional wisdom to posit an alternative rationale driving the purchasing frenzy.
Bitcoin as a Hedge Against Fiat Currency
“I initially credited the resurgence of Bitcoin to the advent of ETFs,” Cramer remarked during a segment on CNBC’s “Squawk On The Street.”
“However, I believe individuals are adopting a different mindset, mistrusting traditional fiat currencies,” Cramer elucidated.
Cramer delineated that Bitcoin is metamorphosing into a stalwart diversification tool against the depreciating value of the U.S. dollar and other fiat currencies, which lack tangible backing, unlike gold, for instance.
The U.S. terminated the gold standard in 1971, leading to a stark erosion of the U.S. dollar’s purchasing power, depreciating by 98% over the subsequent 52 years.
Recently, Bank of America analyst Michael Harnett correlated Bitcoin’s surge to the escalating U.S. debt levels, highlighting that the national debt is ballooning by approximately $1 trillion every 100 days, hurtling toward a projected $35 trillion mark by April.
Given Bitcoin’s capped total supply of 21 million coins, many view it as a bulwark against the continual devaluation of the U.S. dollar and other fiat currencies.
“Younger generations seem convinced that the only path to redemption lies in inflation, a narrative that fosters the circulation of cheaper dollars,” Cramer opined.
Cramer’s Shifting Stance on Cryptocurrency
Jim Cramer’s perspective on Bitcoin and the broader crypto landscape has undergone fluctuation in recent years. While he ventured into Bitcoin investments in early 2021, divesting near the peak as the industry confronted multiple challenges, including the collapse of crypto platform FTX.
Subsequently, Cramer has adopted a cautiously reserved approach towards cryptocurrencies. However, his recent musings hint at a potential reconsideration of his stance. Last week, he hinted at the prospect of Ethereum, indicating that it has substantial growth potential. On Monday, he forecasted a resurgence in the cryptocurrency realm upon the anticipated approval of Ethereum ETFs.
“Initially, my perception aligned with the ETF narrative. I concede that… An Ethereum ETF is on the horizon, prompting a call to action – brace yourselves,” Cramer emphasized.
Time to Dive Deeper: Is Jim Cramer Embracing Crypto Positivity?
$BTC Price Movements: At the time of reporting, Bitcoin recorded a 24-hour surge of 6.02%, stabilizing at $66,644, as per data from Benzinga Pro.
Image Credit: Eivind Pedersen from Pixabay.
