Jim Cramer: Bitcoin is Topping Out, but Here to Stay

The Recognition of Bitcoin's Longevity

Jim Cramer, the host of CNBC's Mad Money show, believes that bitcoin is reaching its peak. However, he acknowledges that it is a remarkable technological advancement that is here to stay. Cramer's comments come as bitcoin surged past $47,000, driven by the growing optimism surrounding the potential approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC).

Cramer's Opinion on Bitcoin's Peak

During Mad Money's Lightning Round on Monday, Cramer expressed his view that bitcoin is topping out. As a former hedge fund manager and co-founder of Thestreet.com, a financial news website, Cramer's insights carry weight in the investment community. He emphasized the need for investors to consider buying bitcoin directly if they want exposure to the cryptocurrency market.

Investors' Approach to Bitcoin

Many investors are choosing to invest in stocks of companies associated with cryptocurrencies or with significant exposure to bitcoin, rather than buying the digital coins directly. Popular choices include Riot Platforms (Nasdaq: RIOT), Marathon Digital (Nasdaq: MARA), Microstrategy (Nasdaq: MSTR), and Coinbase (Nasdaq: COIN).

The Impact of SEC Approval on Bitcoin's Rally

Bitcoin's recent rally, surpassing $47,000, is fueled by the anticipation of the SEC granting approval for spot bitcoin ETFs. The securities regulator is expected to approve a handful of applicants on Wednesday, further boosting the market's confidence in bitcoin's potential.

The "Cramer Effect" and Bitcoin Market Sentiment

In the crypto world, the "Cramer effect" has become a meme, as many have observed that bitcoin often does the opposite of what Cramer predicts. Despite Cramer's statement about bitcoin topping out, some users expressed bullish sentiment, anticipating a rise in bitcoin's value. It is worth noting that market sentiment can be influenced by a variety of factors, and individual opinions may differ.

Cramer's Shifting Stance on Bitcoin

Cramer was once a supporter of bitcoin, initially recommending a 5% portfolio allocation to BTC in March 2021. However, due to concerns about ransomware and China's mining crackdown, he divested his holdings. He later disclosed an investment in ether (ETH) but raised concerns about Binance, FTX, and Tether. By December 2022, Cramer advised investors to exit the crypto market, citing anticipated SEC actions against non-compliant crypto firms.

Share Your Thoughts

What do you think about Jim Cramer's statement on bitcoin? Do you agree that it is topping out? Share your thoughts in the comments section below.

Frequently Asked Questions

Is buying gold a good retirement plan?

Buying gold as an investment may not seem very appealing at first glance, but when you consider how much people spend on average on gold per year worldwide, it becomes worth considering.

Physical bullion bar is the best way to invest in precious metals. You can also invest in gold in other ways. It is best to research all options and make informed decisions based on your goals.

If you don't want to keep your wealth safe, buying shares in companies that extract gold and mining equipment could be a better choice. If you need cash flow to finance your investment, then gold stocks could be a good option.

You also can put your money into exchange-traded funds (ETFs), which essentially give you exposure to the price of gold by holding gold-related securities instead of actual gold. These ETFs often include stocks of gold miners, precious metals refiners, and commodity trading companies.

How to Open a Precious Metal IRA?

It is important to decide if you would like an Individual Retirement Account (IRA). If you do, you must open the account by completing Form 8606. For you to determine the type and eligibility for which IRA, you need Form 5204. You must complete this form within 60 days of opening your account. You can then start investing once you have this completed. You might also be able to contribute directly from the paycheck through payroll deduction.

You must complete Form 8903 if you choose a Roth IRA. Otherwise, the process is identical to an ordinary IRA.

You'll need to meet specific requirements to qualify for a precious metals IRA. The IRS stipulates that you must have earned income and be at least 18-years old. For any tax year, your earnings must not exceed $110,000 ($220,000 for married filing jointly). Contributions must be made on a regular basis. These rules will apply regardless of whether your contributions are made through an employer or directly out of your paychecks.

You can use a precious metals IRA to invest in gold, silver, palladium, platinum, rhodium, or even platinum. You can only purchase bullion in physical form. This means you can't trade shares of stock and bonds.

You can also use your precious metals IRA to invest directly in companies that deal in precious metals. Some IRA providers offer this option.

However, investing in precious metals via an IRA has two serious drawbacks. First, they don't have the same liquidity as stocks or bonds. They are therefore more difficult to sell when necessary. Second, they don’t produce dividends like stocks or bonds. Also, they don't generate dividends like stocks and bonds. You will eventually lose money rather than make it.

Is it a good idea to open a Precious Metal IRA

Precious metals are not insured. This is the most important fact to know before you open an IRA account. It is impossible to get back money if you lose your investment. This includes investments that have been damaged by fire, flooding, theft, and so on.

Protect yourself against this type of loss by investing in physical gold or silver coins. These coins have been around for thousands and represent a real asset that can never be lost. They are likely to fetch more today than the price you paid for them in their original form.

Consider a reputable business that offers low rates and good products when opening an IRA. A third-party custodian is a good option. They will protect your assets while giving you easy access whenever you need them.

If you decide to open an account, remember that you won't see any returns until after you retire. Don't forget the future!

How Much of Your IRA Should Be Made Up Of Precious Metals

The most important thing you should know when investing in precious metals is that they are not just for wealthy people. They don't require you to be wealthy to invest in them. In fact, there are many ways to make money from gold and silver investments without spending much money.

You could also consider buying physical coins like bullion bars, rounds or bullion bars. Also, you could buy shares in companies producing precious metals. You may also be interested in an IRA transfer program offered by your retirement provider.

You will still reap the benefits of owning precious metals, regardless of which option you choose. They offer the potential for long-term, sustainable growth even though they aren’t stocks.

Their prices are more volatile than traditional investments. If you decide to sell your investment, you will likely make more than with traditional investments.

Are gold investments a good idea for an IRA?

Anyone who is looking to save money can make gold an excellent investment. It can be used to diversify your portfolio. But gold has more to it than meets the eyes.

It has been used throughout history as currency and it is still a very popular method of payment. It's often referred to as “the world's oldest currency.”

But gold is mined from the earth, unlike paper currencies that governments create. This makes it highly valuable as it is hard and rare to produce.

The price of gold fluctuates based on supply and demand. The economy that is strong tends to be more affluent, which means there are less gold miners. The value of gold rises as a consequence.

On the other hand, people will save cash when the economy slows and not spend it. This causes more gold to be produced, which lowers its value.

This is why investing in gold makes sense for individuals and businesses. If you make an investment in gold, you can reap the economic benefits whenever the economy is growing.

Also, your investments will earn you interest which can help increase your wealth. If gold's value falls, you don't have to lose any of your investments.

How is gold taxed by Roth IRA?

Investment accounts are subject to tax based only on their current value and not the amount you originally paid. So if you invest $1,000 in a mutual fund or stock and then sell it later, any gains are subject to taxes.

You don't pay tax if you have the money in a traditional IRA/401k. Dividends and capital gains are exempt from tax. Capital gains only apply to investments more than one years old.

The rules that govern these accounts differ from one state to the next. Maryland's rules require that withdrawals be taken within 60 days after you turn 59 1/2. You can delay until April 1st in Massachusetts. New York allows you to wait until age 70 1/2. You should plan and take distributions early enough to cover all retirement savings expenses to avoid penalties.

Statistics

You can only purchase gold bars at least 99.5% purity. (forbes.com)
Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
(Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)

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