Janice R. Andrews
The contentious digital currency known as Bitcoin has once again attracted attention due to its sharp rise in value, but has financial expert Dave Ramsey—one of its most ardent opponents—softened his position? Well-known for his straightforward approach to personal finance, Ramsey has a history of mocking cryptocurrencies, calling them “risky” and “stupid investments.” But Ramsey appeared to respond to a recent caller’s query with some moderation.
Emailing Ramsey about his thoughts on Bitcoin in light of its recent upswing, Jason from Connecticut emphasized the cryptocurrency’s remarkable market capitalization and value increase. This time, surprisingly, Ramsey refrained from outright disparaging Bitcoin. Rather, he admitted that “Bitcoin is a currency,” which is in line with the opinions of those who support it. But Ramsey soon changed course to emphasize his misgivings.
Ramsey distinguished Bitcoin from other well-known international currencies like the yuan and yen, which are supported by strong economies and long histories, saying that “currencies have no value except for their track record that indicates that two people are willing to fight over them.” He pointed out that Bitcoin, on the other hand, was not widely accepted.
Ramsey warned against the volatility and lack of cash flow of Bitcoin investments, drawing comparisons to the Iraqi dinar. This echoes the views of late colleague Charlie Munger and financial guru Warren Buffett, who have written off Bitcoin as a speculative risk with no inherent value.
Ramsey’s primary investing theory is based on assets that produce observable income; Buffett takes a similar stand, favoring equities and real estate. The well-known semiconductor manufacturer Nvidia stands out as one prominent example. Nvidia’s profits were boosted during the last bitcoin boom by the increased demand for its GPU chips for cryptocurrency mining. Now that the AI industry is growing and Bitcoin is making a comeback, traditional investors who were previously dubious about cryptocurrencies are paying attention to Nvidia’s potential.
The fact that Nvidia generated $29.7 billion in net income in its most recent fiscal year is more evidence of Ramsey and Buffett’s inclination toward cash flow-positive investments as opposed to riskier assets like Bitcoin.
Although he still has doubts about Bitcoin and prefers to make investments that yield real revenue, Dave Ramsey admits that Bitcoin is a currency but warns against its instability. Experienced investors like Warren Buffett and Ramsey still choose traditional investing channels like equities and real estate, as demonstrated by Nvidia’s consistency and profitability in a changing market.
