Former hedge fund manager Jim Cramer has claimed that while wanting to own Bitcoin is understandable, excessive hoarding may end up crashing the market.
There seems no limit to Bitcoin’s rising price, as the cryptocurrency smashes milestone after milestone. Bitcoin is currently taking investors for a wild ride, replete with steep climbs and sudden drops – just hours after crossing $14,000, the cryptocurrency soared past $15,000, followed shortly by a sprint past $16,000 in record time.
“This does feel like it has broken out and it's on liquid oxygen and it's going somewhere,” Cramer observed while speaking on CNBC. “And I don't blame anyone for wanting to own it because it's a fun ride. And I don't want to talk about when the party is going to be over because maybe the thing is going to Mars. Maybe the thing is going to Jupiter.”
Bitcoin’s price movement is becoming increasingly hard to predict, as its unprecedented rise leaves little else to compare it to. The stand-out sentiment in the statements of analysts (including Cramer) appears to be uncertainty regarding where Bitcoin will go next.
However, Cramer is advising caution, claiming that while Bitcoin may appear to be a profitable opportunity, the digital currency’s run could end badly as there seem to be no sellers.
“There's seems to be a level of hoarding. People who are owning it aren't flipping it.”
“… I do want people to understand that there are mechanics behind this thing that make it so there is no sellers” he added. “And if there are no sellers, then it is parabolic.”
While Cramer’s statement regarding the lack of sellers is debatable (trading platforms are chock full of both buyers and sellers as the frenzy escalates), Bitcoin has grown to become a store of value as opposed to a currency, and long-term holding is advised by many as the most sound course of action.
Cramer’s comments come in the wake of his recent statement about how Bitcoin is nothing more than pure gambling. Cramer likened Bitcoin to monopoly money, and advised Bitcoin investors to head to Las Vegas instead.