Nearly 16 years after Bitcoin's creation, it continues to divide opinion among investors and financial experts. Meanwhile, large corporations and financial institutions are adding this volatile asset to their operations. Meanwhile, financial gurus and market veterans remain skeptical.
Dave Ramsey firmly established himself in the latter camp. He has previously described crypto assets as “risky” and “stupid investments,” often mocking investors and advising viewers to stay away from this part of the market.
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That's why viewers of The Ramsey Show were surprised to hear Ramsey take a more measured tone in his recent comments about crypto assets. This is what he said.
Bitcoin is a currency
Jason from Connecticut wanted to know Ramsey's thoughts on Bitcoin following the recent Bitcoin backlash. Each unit of the world's most famous cryptocurrency is currently trading at $67,459, which is nearly four times its value in late 2022.
“A $1 trillion market cap is not a Beanie Baby,” Jason said in an email to Ramsey. Surprisingly, Ramsey did not push back on this question about crypto assets as aggressively as he has in the past. Instead, he struck a more measured tone.
“Bitcoin is a currency,” Ramsey acknowledged, seemingly agreeing with some of the community's most loyal members. But Ramsey went deeper: “Currency has no value other than a track record that shows two people are willing to fight over it.”
He compared BTC to other major assets such as the Renminbi and the Japanese Yen. But he was quick to point out that the world's major currencies are backed by the economic strength of the issuing country and have a much longer track record. “Of all currencies, Bitcoin is the least trusted,” he laughed. “Maybe one day it will level off and become real, but Jason, it's not there.”
He predicts that the asset will remain volatile and that he will not invest in it for the same reasons he does not invest in the Iraqi dinar. Ramsey and his co-hosts argue that Bitcoin is not an “investment” because it does not generate cash flow. “I don't want people who really don't like investing in Bitcoin,” Ramsey said, perhaps proving that he hasn't changed his stance on Bitcoin.
Warren Buffett and his business partner, the late Charlie Munger, made a similar argument.[Bitcoin] “It's a gambling token and has no intrinsic value,” Buffett once said.
With this in mind, investors may have better opportunities within asset classes that produce tangible income.
read more: Suze Orman says Americans are poorer than they think. But living the retirement life of your dreams will be much easier if you know these three simple money moves.
better investment opportunities
Based on the principle that cash flow is the key to good investing, sophisticated investors like Buffett and Ramsey always favor real estate and stocks.
But perhaps traditional value investors and crypto advocates alike can agree that chipmaker Nvidia (NVDA) offers some value. During the last crypto bull market, his Nvidia's revenue increased due to the scramble for the best GPU units for crypto mining.
Now that Bitcoin is on the rise again, Nvidia could see a similar rally. But this time, it's powered up by the ongoing battle of artificial intelligence. The tech giant is spending billions of dollars to secure the company's H100 chip, a key resource for large-scale language models.
In its most recent fiscal year, Nvidia earned $29.7 billion in net income. This means it is making enough profits to attract the attention of traditional investors who are skeptical of cryptocurrencies.
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