Jim Cramer, the U.S. TV investment commentator, said the price of bitcoin could hit $1 million because of companies stockpiling bitcoin to pay off ransomware. The CNBC host was agreeing to a recent comment by Business Insider CEO Henry Blodget, who predicted bitcoin could hit $1 million.
Speaking on his show, “Squawk on the Street,” Cramer said he believes the price could get as high as Blodget predicted.
“I think it could because the European banks are frantically trying to buy them so they can pay off ransomware. It's a short-term way to be able to deal with cybersecurity. It is the way to pay off the bad guys,” Cramer said.
“It’s global… although no intrinsic value, limited supply, as Henry Blodget told us the other day, it could literally go to a million dollars,” one of Cramer’s co-hosts agreed.
Blodget Explains His Reasoning
Blodget made his $1 million price prediction speaking on CNBC’s Squawk Alley. Bitcoin was the subject of a segment and Blodget offered his take on the cryptocurrency’s soaring gains in recent weeks.
Blodget’s predictions were based on factors other than companies stockpiling bitcoin for paying off ransomware.
“Look, this is a perfect asset for a speculative bubble…There is a finite supply,” Blodget said. “There is no intrinsic value. If anybody is persuading you that it should somehow be related to some GDP or gold…put down the Kool-Aid and back away.”
“It has a use,” he replied. “There is no question. There are uses for it. The transactions are steadily increasing. That’s a good sign…if you are going to use it.”
He also sees a bandwagon of investors buying into bitcoin with the hope of striking rich rewards in the long run.
“It could literally go to a million," he said. "There is no reason why no…The logic of folks who are buying and speculating in it…’[They’re saying] All I can lose is a 100%. I could make 10x, a 100x, a 1000x…I’ll take that trade if I’m willing to lose that 100%.’”
Ransomware Requires Bitcoin
Ransomware operators demand bitcoin from victims before allowing them access to their seized files. For those victims not familiar with bitcoin, the attackers offer an 800 phone number.
The Financial Times recently reported that ransomware attackers act like “pseudo companies” and provide videos for victims to instruct them how to pay.
Cramer agreed with this assessment. "When you get hit and you're not sure how to do bitcoin, these cyberattackers have customer service desks to tell you how to buy bitcoins to pay them," Cramer said.
Adam White, who oversees Coinbase, disagreed with Cramer’s assessment. He said the surge in bitcoin’s price is not likely caused by companies buying it to pay ransomware attacks.
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