Personal finance expert and best-selling author Dave Ramsey says he agrees with Berkshire Hathaway CEO Warren Buffett regarding bitcoin. Viewing the crypto as a currency whose value is based on “thin air,” Ramsey stressed: “I wouldn’t wish bitcoin investments on somebody I really dislike.”
Dave Ramsey on Bitcoin: ‘It’s Still Thin Air’
Personal finance guru and Ramsey Solutions CEO Dave Ramsey answered a question about bitcoin in an episode of The Dave Ramsey Show that aired last week. Ramsey is an eight-time national best-selling author who sold more than 11 million copies. A self-proclaimed personal money management expert, he calls himself “America’s trusted voice on money.”
The question came from Jason in Connecticut who asked: “Can we start treating bitcoin the same way you would treat single stocks?” Jason emphasized that with a market capitalization of one trillion dollars, bitcoin is not a Beanie Baby and suggested that it is a viable enough asset to allocate five percent of investment portfolios.
While reading Jason’s question out loud, Ramsey made several remarks. Without disputing that bitcoin’s trillion-dollar market cap sets it apart from Beanie Babies, Ramsey contended:
But it’s still thin air. 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.
Regarding whether BTC is a good enough investment to add to portfolios, Ramsey swiftly said: “No, it’s not.”
The best-selling author proceeded to explain how gold got its value. “The only reason gold has value is two people agree to that value and they fought over it — that’s the only reason, the same reason that green paper has value: two people agree to that value and they fought over it. That’s what gives something value. So commodities are exactly the same way as currencies,” he described, adding:
Bitcoin … someday it may level out and become a thing, but, Jason, it’s not there … I wouldn’t wish bitcoin investments on somebody I really dislike.
Regarding whether bitcoin should be treated like a single stock, Ramsey replied:
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.
Ramsey explained that the value of any currency is based on people’s faith in them, asserting: “Bitcoin has the least faith.” He concluded: “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.”
