Jim Cramer warns that crypto’s recent price action is a “manipulation higher” you should ignore – he likes this shockproof asset for protection instead
After a terrible 2022, it seems that cryptocurrencies have finally found something upward again. Bitcoin, the largest cryptocurrency in the world, is up 39% this year.
But CNBC’s Jim Cramer isn’t a fan.
“The charts, as interpreted by Carley Garner, suggest that you have to ignore the crypto cheerleaders now that bitcoin is bouncing,” he says, citing analysis by DeCarley Trading’s senior commodity strategist and broker Carley Garner.
Some say that cryptocurrencies can be used as a hedge against inflation. Bitcoin, for example, cannot be printed out of thin air like fiat money. The number of bitcoins is limited to 21 million by mathematical algorithms.
However, Cramer suggests using something much older to combat inflation.
“If you seriously want a real hedge against inflation or economic chaos, hun [Garner] says you should stick to gold. And I agree, says the Mad Money host.
Of course, if you’ve been following Cramer, you’ll already know that he hasn’t been optimistic about the crypto world lately.
“The higher manipulation of crypto shows you this is truly a false market,” he tweeted earlier in January.
If you share Cramer’s view and want to use gold as a hedge against inflation and uncertainty, here are three ways to gain exposure to the shiny metal.
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Of course, if you’ve been following Cramer, you’ll already know that he hasn’t been optimistic about the crypto world lately.
“The higher manipulation of crypto shows you this is truly a false market,” he tweeted earlier in January.
If you share Cramer’s view and want to use gold as a hedge against inflation and uncertainty, here are three ways to gain exposure to the shiny metal.
Bullion
Investing in gold has been considered an inflation-fighting move.
It can also be a great hedge against uncertainty, as the value of gold is largely unaffected by economic events around the world.
And because of the precious metal’s safe-haven status, investors often rush to it in times of crisis, making it an effective hedge.
The first method of investing in gold is the simplest: if you want to own gold, just buy gold.
Most bullion stores have a selection of bullion bars and coins, so you can always find something to suit your investment needs. Just remember, if you want to invest in a large amount of gold and don’t want to keep the storage at home, you will probably have to pay for storage in a vault.
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Gold mining companies
When the price of gold goes up, your gold bars and coins will be worth more. But gold mining companies can also benefit from such a scenario.
Barrick Gold, for example, is a gold and copper producer that operates mines and projects in 18 countries in North and South America, Africa, Papua New Guinea and Saudi Arabia. In 2021, the company produced 4.4 million ounces of gold and generated net income of $2.0 billion.
There’s also Newmont (NYSE:NEM), another heavyweight in the gold mining industry and the only gold producer in the S&P 500. Its portfolio of assets spans North and South America, Australia and Africa. The company also produces copper, silver, zinc and lead.
Higher gold prices can allow miners to earn higher revenues and profits, which can translate into higher stock prices. However, every company is different, so be sure to do your research and find the ones that can keep costs down and run efficient operations.
ETFs
Exchange-traded funds have increased in popularity in recent years. They trade on exchanges, so it is very convenient to buy and sell them.
Investors can also use them to get a piece of the gold action.
The best-known ETF in this area is the SPDR Gold Trust (NYSEARCA:GLD), which is designed to track the price of gold. GLD is backed by physical gold bullion sitting at the vaults and has an expense ratio of 0.40%.
The iShares Gold Trust (NYSEARCA:IAU) is another ETF that allows investors to easily track the price of the yellow metal. It holds gold bullion – just like GLD – but has a lower expense ratio of 0.25%.
There are also ETFs that provide exposure to gold mining companies.
For example, the VanEck Gold Miners ETF (NYSEARCA:GDX) tracks the NYSE Arca Gold Miners Index. It has a portfolio of gold mining stocks, with Newmont and Barrick Gold as its two largest holdings.
GDX has an expense ratio of 0.51%.
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This article provides information only and should not be construed as advice. It is supplied without warranty of any kind.
