Jim Cramer Borrows A Page From Jamie Dimon In Warning Investors About Bitcoin ETPs: 'Know What Exactly You Might Be Putting Your Money In'

CNBC's ‘Mad Money' host Jim Cramer weighed in on the decision by the Securities and Exchange Commission (SEC) to approve spot Bitcoin BTC/USD exchange-traded products (ETPs) in the United States.

What Happened: Cramer, referencing comments from JPMorgan CEO said, “I’m taking a page from Jamie Dimon here — this is a caveat emptor situation,” advocating for a well-informed investing approach when it comes to the new spot Bitcoin ETPs. 

He pointed out the mismatch between the amount of money going into these financial products and the rise in Bitcoin’s price.  "You can make up your own mind about what to do with these spot Bitcoin ETPs, I just want to make sure you know what, exactly, you might be putting your money in and how little went into these funds versus how much Bitcoin went up."

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Why It Matters: Commonly known as “ETFs” or “ETPs,” exchange-traded funds and similar exchange-traded products share many characteristics of mutual funds but issue shares that are traded on stock exchanges registered with the SEC.

However, Cramer clarified that approval from the SEC doesn’t equate to an endorsement, referencing the skepticism of SEC Chair Gary Gensler who has expressed concerns about cryptocurrencies. The SEC had rejected over 20 filings for spot Bitcoin ETPs from 2018 to 2023.

Gensler on Jan.9, issued a stark warning to investors, urging caution when considering crypto assets. “If you’re considering an investment involving crypto assets, be cautious. Crypto asset securities may be marketed as new opportunities but there are serious risks involved,” he said.

"At this point, Bitcoin's been around for 15 years, it's fairly well-established, and I don't want to try to stop anyone from speculating in this stuff, as long as they do their research," Cramer added.

Last week, Cramer shared his perspective on the potential market behavior of Bitcoin following the SEC approval of Bitcoin ETFs. He suggested an unusual market pattern might occur, stating, "Normally you would expect a top in Bitcoin on a sell the news situation. I am not even sure that happens…”

Price Action: At the time of writing, Bitcoin BTC/USD was trading at $42,662 down 0.15% in the last 24 hours, according to Benzinga Pro.

Photo by a katz on Shutterstock

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