Benzinga - by Adam Eckert, Benzinga Staff Writer.
Bitcoin (CRYPTO: BTC) crossed the $67,000 level for the first time since 2021 on Monday, adding another leg to the unrelenting rally over the last six months. CNBC’s Jim Cramer believes he knows what’s pushing the world’s largest cryptocurrency higher.
What To Know: Bitcoin has been on a tear as of late, surging back towards the all-time highs it set in November 2021. Most have attributed the rally to increased demand stemming from recently approved spot Bitcoin ETFs, as well as anticipation of April's halving event, but Cramer thinks something else is driving the buying.
“I first thought the rally in Bitcoin was because of the ETFs,” Cramer said Monday on CNBC’s “Squawk On The Street.”
“I just think people are just saying ‘You know what, I don’t trust these fiat currencies.'”
Cramer explained that he believes Bitcoin is being used as a diversification hedge against the U.S. dollar and other fiat currencies, which is money that lacks intrinsic value because it isn’t backed by a tangible asset like gold, for example.
The U.S. abandoned the gold standard in 1971, and the U.S. dollar has lost about 98% of its purchasing power in the 52 years since.
Last week, BofA analyst Michael Harnett linked the recent surge in Bitcoin to rising U.S. debt. The analyst noted that the U.S. national debt is currently rising by about $1 trillion every 100 days and is on pace to exceed $35 trillion by April.
Check This Out: Gold, Bitcoin Rally: Is US Debt Surge A Key Driver?
Given that Bitcoin’s total supply is capped at 21 million, many consider it to be a hedge against continued devaluation of the U.S. dollar and other fiat currencies.
“I think younger people believe that there is no way that we can ever make good other than to reflate, inflate, to make it so we’re paying with cheaper dollars,” Cramer said.
Cramer has gone back and forth on Bitcoin and the broader crypto space in recent years. He bought Bitcoin in early 2021, but cashed out near the highs before the industry battled several headwinds, including the undoing of crypto exchange FTX.
Cramer has maintained a cautious stance on crypto ever since, but recent comments suggest he may be rethinking the space once again. Last week, he suggested that Ethereum (CRYPTO: ETH) could “only go up” from current levels. On Monday, he suggested that eventual approval of Ethereum ETFs will spark another crypto rally.
“I thought a lot of this was the ETF, I admit that … There will be an Ethereum ETF and you’ll have to go buy that one … just get ready,” Cramer said.
Read Next: Is Jim Cramer Getting Bullish On Crypto? Why He Says Ethereum Can ‘Only Go Up’ From Here
$BTC Price Action: Bitcoin was up 6.02% over a 24-hour period at $66,644 at the time of writing, according to Benzinga Pro.
Photo: Eivind Pedersen from Pixabay.
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