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Dave Ramsey Joins Warren Buffett in Bitcoin Skepticism: Will Crypto Bubble Burst?

Last Updated March 18, 2024 2:52 PM
Teuta Franjkovic
Last Updated March 18, 2024 2:52 PM
By Teuta Franjkovic
Verified by Peter Henn

Key Takeaways

  • Dave Ramsey echoes Warren Buffett’s skepticism, calling Bitcoin a “thin air” currency with no real value.
  • He advises against Bitcoin due to its lack of long-term track record and prioritizes assets with established trust.
  • Despite his Bitcoin criticism, Buffett’s company’s top performer (Nubank) embraces cryptocurrencies.

Dave Ramsey, a personal finance expert and best-selling author, has agreed with Berkshire Hathaway CEO Warren Buffett’s skeptical views on Bitcoin.

Labeling the cryptocurrency as a having a value is derived from “thin air,” Ramsey addressed a question about Bitcoin on The Dave Ramsey Show. An eight-time national best-selling author with over 11 million copies sold, Ramsey, who dubs himself “America’s trusted voice on money,” took a query from a Jason in Connecticut.

Jason’s question was: “Can we start treating Bitcoin the same way you would treat single stocks?”

Highlighting Bitcoin’s market capitalization of one trillion dollars, he argued against the notion that Bitcoin is akin to a Beanie Baby, suggesting instead that it represents a sufficiently reliable asset to justify allocating five percent of an investment portfolio to it.

While Ramsey acknowledged the significant market capitalization of Bitcoin, he maintained his stance with several critical remarks.

Ramsey Channels Warren Buffett, Calls Bitcoin a ‘Zero-Sum Game’

Regarding the inclusion of Bitcoin (BTC) in investment portfolios, Ramsey was quick to dismiss the idea, asserting: “No, it’s not.”

He then went on to explain how gold derives its value, drawing parallels to broader concepts of value in economics.

He said:

“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.”

Ramsey explained that the only reason gold has value is two people agree to that value and they fought over it. According to him, that’s the only reason, the same reason that green paper has value. Therefore, commodities are exactly the same way as currencies, highlighting the fundamental agreement and conflict that underpin the valuation of commodities and currencies alike.

He added:

“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 the question of treating Bitcoin like a single stock, Ramsey offered his perspective.

He elaborated:

“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.”

Buffett’s Top Pick Embraces Crypto

Ramsey clarified that the value of any currency hinges on the collective belief in its worth. He also claimed that Bitcoin garnered the least confidence among currencies. He stated his investment philosophy is to avoid assets lacking a solid history of trust. Furthermore, Ramsey mentioned that he does not typically invest in currencies but would rather use them as intended.

Billionaire investor Warren Buffett has consistently voiced skepticism towards Bitcoin and cryptocurrencies, especially against the backdrop of what some perceive as the US’s “battle” against Bitcoin.

However, in a twist that juxtaposes his known stance amid concerns over potential threats to the US dollar’s stability, an examination of the stock portfolio of Warren Buffett’s Berkshire Hathaway revealed that its most prosperous investment over the past year has been in Nubank .

Nubank stands out as a fintech enterprise that favors Bitcoin and other cryptocurrencies. This, in turn, marks an interesting point of contrast within Buffett’s investment landscape.

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