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CNBC’s Jim Cramer on Tuesday implored investors to stay away from speculative assets such as cryptocurrencies, warning that they will continue to struggle during the ongoing Federal Reserve tightening cycle.
“Look, Fed chief Jay Powell told us that we need to stop doing stupid things with our money.
That was the thrust of his speech on Friday,” the “Mad Money” host said, referring to the top U.S. central banker’s Jackson Hole address, in which Powell warned the Fed’s commitment to squashing inflation could bring “some pain” to American businesses and households.
Wall Street has finished lower in three straight sessions as investors digest Powell’s Friday morning remarks.
Powell is “going to bring the pain until it puts an end to the gambling,” Cramer said.
“Of course, he’ll also hurt some good investments in the process.
But we won’t see the end of this decline until we get a giant washout of all things that are speculative.”
That includes, but is not limited to, cryptocurrencies, said Cramer, who also acknowledged he no longer believes in the argument that bitcoin is a store of value.
In Cramer’s opinion, other speculative parts of the market to avoid are money-losing firms that went public via special purpose acquisition companies and meme stocks.
“This is what it looks like when the Fed gets serious,” Cramer said. What matters is that we just have to get through it intact.
Don’t get memed. Don’t get SPAC’d. Don’t get crypto’d. And you’ll get through this thicket and find yourself in a much better time when we are sufficiently oversold for a huge bounce.” - CNBC
