Dave Ramsey: Crypto – Risky Business or Wise Investment?

Despite some acknowledgment of their presence, Dave Ramsey maintains his skepticism towards cryptocurrencies.

Earlier this month, Ramsey Solutions (Ramsey), established by personal finance expert Dave Ramsey to deliver financial counseling and education, published an article entitled “Is cryptocurrency a viable investment option?” The Ramsey Show is hosted by the eight-time national best-selling author Dave Ramsey.

The article’s attribution to “Ramsey” may pertain to an individual employed by the Ramsey Solutions team of financial specialists and writers.

Ramsey elaborated, “Crypto is not a viable investment due to risks such as volatility, an unproven rate of return, and fraud.”

“Get-wealthy-fast schemes are precisely that: schemes.” “Place no money, hopes, or desires at risk into them,” the article advises.

“Simply put, investing in cryptocurrencies is not a viable long-term investment strategy.” We are not claiming that cryptocurrencies will cease to exist. We are not implying that it is abhorrent. “However, we claim that cryptocurrencies have no historical record of generating capital,” Ramsey elaborated:

“The road to building wealth is slow and steady, and there are still way too many unknowns when it comes to cryptocurrency. Could crypto become a more legit way to invest later on down the road? Maybe. But as things stand today, just say no.”

On the internet, cryptocurrency is traded directly between users, bypassing intermediaries such as banks or governments. The digital realm is comparable to the Wild West, except that no marshal can enforce the law.

Cryptocurrency’s volatility in value is due to the absence of significant regulatory oversight. It is impossible to compute returns or discern changes in the same manner as growth stock mutual funds.

Insufficient data and a lack of credibility preclude the development of a viable long-term investment strategy predicated on cryptocurrencies. The author warned, “Do not gamble with your financial future at this location.”

Dave Ramsey’s Concerns and Considerations for the Future

Additionally, Dave Ramsey elaborated that during the initial quarter of 2023, hackers stole $400 million worth of cryptocurrency, emphasizing, “Crypto seems to entice nefarious individuals.”

Dave Ramsey stated, even though not all crypto users are “evading the government and engaging in shady transactions on the black market,” that “cryptocurrencies would call out the name of someone who wished to commit a crime while evading detection.”

Furthermore, the author highlighted the United States government’s consideration of establishing a central bank digital currency (CBDC). Ramsey concluded, “There is no telling how the value of cryptocurrencies would be affected if a U.S. CBDC materializes.” He stated:

“Crypto is risky for a lot of reasons. But the big reason it’s not a safe investment is because it can have huge swings in price in the blink of an eye. In the investing world, that’s called volatility. And volatility isn’t good for an investment portfolio.”

Dave Ramsey has maintained a longstanding skepticism towards cryptocurrencies and bitcoin. He stated on his Ramsey Show on multiple occasions that they are not wise investments.

The self-proclaimed personal finance expert expressed skepticism regarding the capability of Bitcoin in December 2020 and advised investors to sell immediately.

After the collapse of the FTX cryptocurrency exchange, he reaffirmed his crypto advisory. Despite this, he declared in 2022 that cryptocurrencies are entertaining, here to stay, and viable portfolio components.