Jim Cramer Advices to Avoid Crypto Amid Powell’s Comments
On Tuesday, Jim Cramer of CNBC pleaded with investors not to put their money into speculative investments such as cryptocurrencies, warning that such investments will continue to struggle during the current cycle of tightening monetary policy by the Federal Reserve.
“Listen, Federal Reserve Chair Jay Powell advised us to refrain from being so careless with our finances. That was the thrust of his speech on Friday,” the host of “Mad Money” said, referring to the top official at the Federal Reserve, Jerome Powell’s, address at Jackson Hole, in which he warned that the Fed’s commitment to squashing inflation could bring “some pain” to American businesses and households.
As investors processed Powell’s statements from the morning of Friday, the market closed down for the third consecutive session on Wall Street.
Cramer predicted that Powell would “bring the pain” until the Fed “puts an end to the gamble. Of course, he’ll also hurt some excellent investments in the process… but we won’t see the end of this decline until we get a massive washout of all speculative things,” the analyst said. “He’ll also injure some good investments in the process.”
This includes cryptocurrencies but is not limited to them, Cramer said. He also said that he no longer buys the notion that bitcoin is a store of wealth. However, he emphasized that this does not exclude cryptocurrencies.
In Cramer’s opinion, additional risky sectors of the market to avoid are money-losing enterprises that came out publicly via special purpose purchase companies and meme stocks.
“This is what it looks like when the Fed gets serious,” Cramer said.
“This is what it looks like. All that important is that we emerge unscathed on the other side of this challenge. Don’t get memed. Don’t get SPAC’d. Don’t get crypto’d. And you’ll get through this thicket and find yourself at a lot better period when we are sufficiently oversold for a major bounce.”