Bitcoin BTC/USD has crossed the $67,000 mark for the first time since 2021, marking yet another milestone in its relentless climb over the past six months. Renowned financial expert, Jim Cramer, has put forth his theory on what is propelling the world’s largest cryptocurrency to new heights.
The Drive Behind Bitcoin’s Ascension
Insights: Bitcoin’s recent meteoric rise has seen it inch closer to the all-time peaks it hit back in November 2021. While many have attributed this surge to the approval of spot Bitcoin ETFs and the anticipation surrounding April’s halving event, Cramer posits a different catalyst driving this buying frenzy.
Cramer remarked on CNBC’s “Squawk On The Street” on Monday, “I initially credited the Bitcoin rally to the ETFs.”
He continued, “I believe people are now expressing their distrust towards fiat currencies.”
Cramer elaborated that Bitcoin is serving as a diversification tool, a hedge against fiat currencies like the U.S. dollar, devoid of any intrinsic value since they lack a tangible asset like gold.
Having abandoned the gold standard in 1971, the U.S. dollar has seen a substantial erosion in its purchasing power – a whopping 98% decline over 52 years, highlighting the ongoing debasement of fiat money.
Recent analyses, like that of BofA’s Michael Harnett, draw links between Bitcoin’s surge and the escalating U.S. debt trajectory. With the national debt mushrooming by approximately $1 trillion every 100 days, hurtling towards a projected $35 trillion by April, Bitcoin emerges as a perceived shield against the relentless devaluation of the dollar.
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The Underlying Beliefs and Resilience
Given Bitcoin’s finite supply capped at 21 million, it is often viewed as a safeguard against the continuous depreciation of fiat currencies, echoing the sentiments of many who have lost faith in traditional monetary systems.
Cramer highlighted, “Younger generations perceive that the only fix to our financial predicament is through inflation and currency devaluation, a cycle that sustains itself by paving the way for transactions to occur with cheaper dollars.”
Having oscillated in his views on Bitcoin and the broader cryptocurrency market in recent years, Cramer’s latest comments seem to suggest a potential revival of interest in the space. Having purchased Bitcoin in early 2021 and exited close to its peak amidst industry turmoil, including the upheaval at crypto exchange FTX, he has been cautiously observing the sector ever since.
However, Cramer hinted at a reassessment, insinuating a shift in stance. He recently asserted that Ethereum, symbolized by ETH/USD, may only be on an upward trajectory from its current levels, hinting at the future endorsement of Ethereum ETFs as a trigger for another crypto surge.
“Initially, I ascribed much of this to ETFs, a view I admit to holding … An Ethereum ETF is on the horizon, and you should be prepared,” Cramer opined.
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$BTC Price Movement: Bitcoin witnessed a 6.02% surge over a 24-hour period, reaching $66,644 at the time of reporting, according to Benzinga Pro.
Photo Credit: Eivind Pedersen from Pixabay.