Borrowing money to invest in cryptocurrencies such as Bitcoin has long been a problem in the crypto community. Mostly, there has been a lot of news about people who borrowed money to buy these cryptocurrencies and ended up with a huge debt that they couldn’t pay off right away since the price of the digital assets had fallen, as it often does.
A notable name in the investing world, Jim Cramer, has spoken out against this behavior. In a recent CNBC interview, the Mad Money host offers a variety of cryptocurrency investing recommendations. He discusses the good, the bad, and the ugly of cryptocurrencies.
Jim Cramer of CNBC’s Make It offers advice to young people who have found themselves investing in the industry in a new video. He says that investing in cryptocurrencies, of which he owns some, has advantages. The gains gained by some in the market have prompted others to want to get in and try their luck in the market. However, these people are all too often drawn in and end up making poor choices.
Cramer warns about borrowing money to buy cryptocurrency. Now, as he states in the video, he is not opposed to borrowing but stresses that borrowing should only be done for the proper reasons. Borrowing for a house or a car falls under this category because these items are used on a daily basis. When it comes to investing in these digital assets, however, such borrowed cash should never be used.
The host of Mad Money emphasizes that cryptocurrencies are not a sure thing. He calls them “hope securities,” and he recommends against investing in them. Because they are speculative assets, Cramer advises that you “admit that they’re speculative.” As a result, investors will not make the error of classifying them as “Proctor & Gamble,” assuming that they will continue to perform well.