Jim Cramer Picks Gold Over Bitcoin as a Hedge, but Calls Ethereum and BTC ‘Vetted’

Jim Cramer, the CNBC host, told a young investor that gold bullion ranks above Bitcoin (BTC) as portfolio insurance. He still did not write off Bitcoin, naming two cryptocurrencies he described as ‘vetted.’

The mixed stance emerged during a Mad Money episode devoted to Cramer’s investing principles. On the same broadcast, he cautioned against low-grade tokens, keeping bullion as his hedge and making room for two coin exceptions.

Why Gold Wins Out Over Bitcoin for Jim Cramer

A listener called Jacob told Cramer that a large part of his investment funds had gone toward a down payment on a home. He then asked how he could start rebuilding.

Cramer’s advice was to split fresh money evenly between index funds and five stocks chosen by the caller.

For insuring that combination, he said, Bitcoin or gold could work. His preference is physical gold, but when bullion is not within reach, he would use SPDR Gold Shares (GLD), a gold ETF.

Cramer stopped short of labeling Bitcoin a weak hedge, though. He was merely expressing a preference.

Robin Brooks, senior fellow at the Brookings Institution, takes the same gold-first position. In August, he wrote that Bitcoin is something he would steer clear of, adding that he does not regard it as a safe haven.

August painted a different picture on the buying side, with investors purchasing both assets. Eric Balchunas, an ETF analyst at Bloomberg, flagged record inflows of $7 billion over five days into gold and Bitcoin ETFs.

Those flows added fuel to the 60/40 portfolio debate, the classic split of 60% stocks and 40% bonds. Matt Hougan, chief investment officer at Bitwise, made the case that equities and fixed income are both denominated in dollars.

Why Two Cryptos Make the Grade for Jim Cramer

The crypto remark was linked by Cramer to quality. Investors who chase apparent bargains, ranging from penny stocks to junk tokens, are taking on the risk of losses, he said.

Rather than doing that, he said, buyers could simply opt for Ethereum or Bitcoin. Still, when it came time to pick a hedge, he put Bitcoin next to gold before settling on gold.

His recent Mad Money selections have likewise been connected by Cramer to rising interest rates.

As money streams into both assets, traditional-finance voices still have not settled which of the two insures a portfolio. Cramer’s remarks reflect his own view and do not constitute investment advice.