Dave Ramsey, the acclaimed personal finance author and radio show host, recently voiced his skepticism about Bitcoin BTC/USD on a broadcast of The Dave Ramsey Show.
What Happened: Drawing comparisons with Warren Buffett’s stance on the cryptocurrency, Ramsey did not hold back his reservations.
One caller, Jason from Connecticut, asked Ramsey if Bitcoin, with its trillion-dollar market cap, should be handled similarly to traditional stocks in investment portfolios, Ramsey said “But it’s still thin air.”
At the time of writing, Bitcoin's market capitalization stands at $1.34 trillion.
Ramsey, who has sold over 11 million books and earned a reputation as a go-to money management expert, quoted Buffett to reinforce his point.
“Ask people like Warren Buffett who says if he doubled the amount he had put in bitcoin, he would still have zero, because that’s the amount he’s put in bitcoin. I’m going with Warren on this one.”
During the 2018 annual shareholder meeting of Berkshire Hathaway Inc., Buffett labeled Bitcoin as “probably rat poison squared.”
Ramsey compared the value of gold and paper currency, explaining that their worth stems from a shared belief in that value. “No, bitcoin is a currency. Currencies have no value except for their track record that indicates that two people are willing to fight over them.”
For Ramsey, the long history of trust is a key component in considering investments, and by that measure, Bitcoin still fails to measure up. “I do not invest in things where people have not established a long track record of faith, and even then, on a currency, I don't invest in a currency. I would utilize it.”
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Why It Matters: Bitcoin’s value marked a significant achievement reaching a peak not seen in over two years, with prices circling the $67,000 range. The surge is partly attributable to the expectations of new spot ETFs increasing demand for the cryptocurrency.
Earlier in 2021, Ramsey expressed skepticism about cryptocurrency as an investment. Viewing cryptocurrency largely as a high-risk, get-rich-quick venture, he has always preferred a more steady and, by his own admission, "boring" approach to growing wealth.
On his radio program, when approached by Michael from Dayton, Ohio, about delving into cryptocurrency investment, Ramsey responded, "Bitcoin’s hot. Crypto’s hot. A lot of people are making a lot of money on it right now."
Ramsey Solutions has consistently stated that cryptocurrencies like Bitcoin are not advisable investments, as echoed in a February blog post. Although they are not dismissing the future of cryptocurrencies or declaring them entirely negative, the Ramsey Solutions team advises its readership to steer clear, saying, "just say no."
Price Action: At the time of writing, the price of BTC was $68,517 up 3.82% in the last 24 hours, according to Benzinga Pro.
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