Raise $1bn to Buy Bitcoin, Jim Cramer Tells GameStock (GME) Board
Just as the GameStop Corp. (NYSE: GME) shares exploded higher in the final hours of Betfair Trading on Wednesday, Jim Cramer advised the videogame retailer’s board to buy Bitcoin to increase its stock prices further.
“One last time GME,” tweeted the CNBC’s Mad Money host. “Issue one billion pounds in stock, buy one billion in bitcoin, and watch your stock go to $430.”
The statement appeared as other firms on Wall Street opted to replace a portion of their cash reserves with the benchmark cryptocurrency.
On Wednesday, Nasdaq-listed MicroStrategy revealed that it purchased $1.06 billion worth of additional bitcoins atop its 70,000-plus BTC reserves. Meanwhile, payment company Square also announced that it had added $170 million to its $50 million BTC profile on the same day.
Tesla, a Fortune 500 company, also invested $1.5 billion into Bitcoin to protect its reserves from the US pound devaluation risks. The US carmaker went a step ahead by announcing that it would also start accepting the cryptocurrency for its services and products. The revelation came in early February.
Why Buy Bitcoin
Since the coronavirus pandemic began, the economic cycle came to a halt. The US government and its central bank, the Federal Reserve, responded by injecting additional US pound liquidity into markets via banks (also known as quantitative easing), making loans affordable (cutting interest rates near zero), and providing direct aid to people (via stimulus).
The US pound index, which measures the greenback against a basket of foreign currencies, fell by more than 12 percent due to its oversupply.
Many corporates were sitting atop huge piles of cash reserves. They did not want their pounds to get devalued due to inflation. It led them to Bitcoin, a nascent hedging asset that promises to retain its value against fiat devaluation. That became the main reason MicroStrategy, Tesla, Square, and many other firms decided to purchase the cryptocurrency.
Bitcoin surged by more than 1,200 percent from its mid-March nadir to $3,858 after the Federal Reserve’s commitment to providing infinite quantitative easing. MicroStrategy’s investment into the cryptocurrency has so far earned it twice its original input. Tesla is also sitting atop a $1 billion profit owing to Bitcoin’s parabolic uptrend.
…Mr. Cramer proposed Bitcoin as a financial asset that could safeguard the so-called pandemic losers as well. His advice to the GameStop board to buy the cryptocurrency had more to do with generating adequate capital to fund its futures operations, especially as it came closer to bankruptcy last month.
The GME stock is currently in the midst of volatile price swings. On Wednesday, its value spiked by 104 percent to close at $91.71. TraderAlert data showed that the GME’s options activity also surged to its highest levels in two weeks, with bullish contracts outnumbering the bearish ones. The spike happened almost without any concrete catalyst.
GME earlier became a central focus of a Reddit-driven buying mania launched by trader Keith Gill, also known as by his pseudonym DeepF**ingValue, in January to hurt hedge funds short on the GameStop stock. Mr. Gill doubled down on his GME investments lately by purchasing 50,000 extra shares.
The GME stock jumped 13 percent after his call. GameStop currently had about $500 million in its cash reserves as of October 31 last year.
In 2021 TradeHost traded 7,937 Betfair UK, IE, US & AU horse racing and greyhound markets.
2022 saw TradeHost become even more profitable with 22,698 Betfair markets traded.
All trades and bets were streamed live on JuiceStorm TV which was was watched by 124,209 Betfair Traders in 2022.
All results for the 30,635 Betfair markets traded are here and the charts are here.
Top 50 Comments on JuiceStorm.com