Jim Cramer: Buy Coinbase stock and allocate 5% of your portfolio to cryptocurrencies

Jim Cramer, host of CNBC’s “Mad Money,” recommended buying Coinbase stock and suggested allocating 5% of a portfolio to cryptocurrencies.

The 66-year-old finance figure said that while Coinbase’s IPO was “terrible,” he believes Coinbase is an important player in the crypto space:

“I think Coinbase is cheap. They sold a lot of stock when they first started, which I was against. They should be a buyer, not a seller. I think the company is a natural repository of cryptocurrency.”

Coinbase (COIN) stock has performed poorly since its listing on the Nasdaq exchange in mid-April. At the time of writing, COIN is priced at $248, down 27% from its all-time high of $340 on April 16.

However, the company had a strong performance last quarter, reporting a net profit of $1.6 billion in the second quarter, compared to $32 million in the second quarter of 2020.

Cramer added in his comments that direct exposure to cryptocurrencies should also be an option for investors:

“I own Ethereum outright. I think you should have up to 5% of your portfolio in crypto. I’m a believer in crypto.”

Jim Cramer is a former hedge fund manager and co-founder of financial news site TheStreet.com. While Cramer has remained relatively consistent on Ethereum recently, he has had an on-and-off love affair with digital gold since buying his first Bitcoin in December 2020.

During the June crypto downturn, Cramer urged investors to be “patient” with BTC — but ten days later his patience ran out, as he boldly claimed that BTC “is not going up for structural reasons,” revealing:

“I’ve sold almost all of my Bitcoin. I don’t need it.”

In March, Cramer optimistically stated that Bitcoin had made him “a ton of money” while his investments in gold and stocks had disappointed him. In April, he claimed that he had cashed out 50% of his Bitcoin to pay off his mortgage.