Bitcoin BTC/USD surged past $67,000 on Monday, marking its highest level since 2021 and extending an epic six-month bull run. CNBC’s Jim Cramer believes he has unraveled the mystery behind this meteoric rise.
The Rising Surge: Bitcoin’s recent ascent has seen it rapidly approaching its all-time peak from November 2021. While many credit the surge to the approval of spot Bitcoin ETFs and the forthcoming April halving event, Cramer has another theory driving the monumental surge.
“I initially believed the ETFs were fueling the Bitcoin rally,” Cramer remarked during an appearance on CNBC’s “Squawk On The Street.”
“I simply think people are now questioning the reliability of fiat currencies.”
Cramer expounded on his notion that Bitcoin is now serving as a diversification shield against traditional currencies like the U.S. dollar, which are essentially paper money devoid of intrinsic worth, lacking any tangible backing like gold, for instance.
In 1971, the U.S. abandoned the gold standard, leading to a staggering 98% devaluation in the purchasing power of the dollar over the 52 years since the move.
Recently, BofA analyst Michael Harnett tied Bitcoin’s recent upsurge to the mounting U.S. debt. Harnett emphasized that the U.S. national debt is ballooning by $1 trillion approximately every 100 days, hurtling towards a projected $35 trillion mark by April.
With Bitcoin’s total supply capped at 21 million, many view it as a hedge against the relentless devaluation of the U.S. dollar and other fiat currencies.
“The younger generation believes that the only way to rectify this is through inflation, to keep devaluing the currency until we are transacting with cheaper dollars,” Cramer opined.
In a topsy-turvy stance on Bitcoin and the wider crypto domain, Cramer purchased Bitcoin in early 2021, exiting near the peak before the sector grappled with numerous challenges, including the upheavals at crypto exchange FTX.
Maintaining a cautious approach to crypto since then, Cramer’s recent statements hint at a potential reconsideration of his position. Last week, he implied that Ethereum ETH/USD could see sustained upward movement. On Monday, he suggested that the imminent approval of Ethereum ETFs could spark another surge in the crypto realm.
“My initial belief was centered on the ETF, I must confess … An Ethereum ETF is on the horizon and investors better be prepared; just brace yourselves,” Cramer concluded.
In terms of price action, Bitcoin witnessed a 6.02% uptick over a 24-hour period, hovering around $66,644 at the time of this report, as per Benzinga Pro.
Photo: Eivind Pedersen from Pixabay.