Borrowing money to invest in cryptocurrencies like Bitcoin is a common occurrence in the crypto space. In most cases, there are countless reports of people who borrowed money to buy these cryptocurrencies and ended up in huge debts that they could not repay immediately because digital asset prices have crashed because they do not want to. .
Jim Kramer, a prominent figure in the investment scene, has come out to warn against this practice. Mad Money Host had various tips for investors in cryptocurrency on a new CNBC where he talked about the good, bad and ugly aspects of cryptocurrency.
Don’t buy bitcoin with borrowed money
In a new video from CNBC’s Make It, Jim Kramer points out his advice to young people who have seen themselves investing in space. He explains that he has the ability to invest in cryptocurrencies, some of which he keeps to himself. The gains that some have made in the market have been a drive for others to enter and make their fortunes in space. But often, these people can suck and make terrible decisions.
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Kramer warns of the dangers of borrowing money to buy crypto. Now, he is not against borrowing, as he mentioned in the video, but explains that one should borrow for the right things. This includes borrowing for a house or car because these things are used in everyday life. However, when it comes to investing in these digital assets, such borrowing should not be done with funds.
BTC still trading above $30,000 | Source: BTCUSD on TradingView.com
Mad Money Host points to the fact that cryptocurrencies are not a sure bet. He refers to them as “hope securities” which he advises not to invest in hope. Since they are speculative assets, Kramer first “acknowledges that it is speculative.” As such, investors should not make the mistake of putting them in the “Proctor and Gamble” class, which means they will continue to do well.
Put some crypto in your portfolio
Kramer has always been vocal about his thinking about cryptocurrency. They were not always bullish but he did not condemn the investment in them. He admitted to owning some Ethereum which he said he got after buying something for an NFT auction. However, he continues to promote caution when dealing with such highly speculative and volatile assets.
For each portfolio, he said, investors should keep 5% in gold and another 5% in crypto. While acknowledging the possibility of making money in crypto, he agrees that it is legal to try to make money with cryptocurrency.
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Kramer goes on to suggest that investors interested in cryptocurrencies should stick to the market’s largest currencies, such as Bitcoin and Ethereum. “I wouldn’t discourage you from buying crypto because it’s all about luck, and how it can create a whole new team, luck,” Kramer said. “I want you to be that,” he added.
At the time of writing, Bitcoin and Ethereum continue to lead the crypto space in terms of market cap. However, the recent downtrend has come down since the general market sat at 1.23 trillion.
Featured image from Livekindly, chart from TradingView.com
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