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Here’s What Dave Ramsey Thinks Of Cryptocurrency

It seems as if I missed the boat again. Back in early 2016, my wife and I were at a tennis camp in Miami.

One of the other players introduced himself as being in the “crypto” space. I had no idea about Bitcoin or any other cryptocurrency and shrugged it off.

He told me to consider investing only $1,000 to test the waters. 

Long story short, that $1,000 investment (that I should have made), would be worth over a million dollars today :(.

At the time, I was still a Dave Ramsey follower mainly sticking to his investing advice (index funds).

But I also started investing in real estate syndications around that time as well.

So the thought of investing in something I had no clue about, like Bitcoin, wasn’t on my radar. 

Ever since Bitcoin (BTC) was created in 2009, investors have been looking for ways to make money from it. Now we’re starting to see all types of businesses jumping on the Bitcoin bandwagon too, as many are accepting it as payment.

Even if you don’t have an acquaintance of bitcoin and know the best way to potentially build wealth with it, let’s take a look to see if it could potentially be right for your portfolio.


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What Is Bitcoin?

cash vs bitcoinFiat money (such as U.S. dollars) is regulated and backed by the government.

In other words they:

  • control who to give it to
  • set the interest rate to lend it out
  • can print more on demand

On the other hand, Bitcoin is a decentralized digital cash that eliminates the need for intermediaries (i.e. banks and governments) that uses cryptography to keep it secure.

When first learning about Bitcoin, I thought there were physical coins to possess.

But this isn’t the case.

Bitcoin has its balances kept on a public ledger that everyone has access to. Each record is encrypted for security yet fully transparent so anyone can see what’s going on within the network.

In other words, the passing of “secret” information can only be read by the sender and receiver.

Bitcoin “mining” is the process of verifying all transactions using a massive amount of computing power.

Who Started Bitcoin?

Bitcoin was founded in 2009 by Satoshi Nakamoto.

Supposedly Nakamoto was a pseudonym and was careful to never reveal any self-identifying information when conversing with fellow developers early on.

To this day, Nakamoto remains anonymous and seems to never want to be discovered. 

How Does Bitcoin Work?

Each bitcoin is a computer file stored in a digital wallet on a smartphone or computer. 

It’s powered by open-source code known as blockchain. This is a digital ledger that tracks the creation and movement of each Bitcoin.

Because it’s public and decentralized, anyone with internet access can view any transaction in the network’s history.

This gives the blockchain’s history full transparency while users’ identities remain anonymous.

Within each digital wallet, there’s a public key and a private key. Both of these work together to allow the owner to initiate and digitally sign transactions, providing proof of authorization.

Think of the public key as your home address. This is what you give to people in order to receive money. The private key is similar to your home’s key to unlock the door. This allows you to keep your cryptocurrency safe.

How Do You Mine Bitcoin?

bitcoin mining

Bitcoin mining is the process of creating new bitcoin using computer systems with specialized chips competing to solve mathematical puzzles.

The first anonymous miner to solve the puzzle is rewarded with Bitcoin.

The mining process also confirms transactions on the cryptocurrency’s network making them trustworthy. 

Initially after Bitcoin was launched, it was mined on regular desktop computers. Due to this extremely slow process, cryptocurrency is now generated using large mining pools spread across the world.

Nakamoto originally limited the overall Bitcoin supply to 21 million. And the last one won’t be mined until 2140.

What Does Dave Ramsey Think Of Bitcoin And The Cryptocurrency Industry?

Famous radio show host and author Dave Ramsey is best known for his common sense investing advice. 

Some of his popular books include:

Most people that call into the Dave Ramsey Show ask for financial investment advice that typically involves debt reduction

An example would be someone with $150,000 in student loans, $60,000 of car payments, owes $25,000 on credit cards making $47,000 a year.

His answer is always the same, start using his 7 Baby Steps to Financial Peace.

He seems to be getting more questions about BTC and cryptocurrency as it’s becoming more popular. 

If you take a look at his website, it discusses in detail about investing in cryptocurrency. It explains what it is and how to invest in it, while also offering insight into whether buying is a good idea or not.

Dave Ramsey Crypto

Spoiler alert

Here’s a recent FB post from his company.

As you can see, Dave is not in favor of bitcoin or any type of cryptocurrency.

He also didn’t think any businesses should have taken any PPP loans during the pandemic either.

But I digress.

Should I Invest in Crypto Dave?

There was a 24 year old caller that asked Dave on his show whether or not he thought making a bitcoin investment or in other cryptocurrencies was a good idea.

The episode was titled,  “Should I Invest in Cryptocurrency?”

The caller, Michael, had saved up $3,800 and wanted to know what some of the best investments he should look into.

Ramsey went on to tell him about how when he was 24, he made a lot of poor financial decisions that eventually led him to being broke. At the time, Dave bought a lot of “nothing-down real estate” and “gold futures” which caused him to lose everything and file bankruptcy. 

He acknowledged that Bitcoin and crypto are both hot and people are making tons of money on it. 

But he told the caller that “as an old guy, crypto falls under the heading of getting rich quick and I have not found many people that get rich quick. And I don’t like losing money.”

Bitcoin image

Dave’s Crypto Investing Recommendation

On other parts of Dave’s website, he continues that Bitcoin is complicated investment to understand making it too risky. 

In fact, he described it as “downright mysterious,” as well as a very volatile investment that could easily rise either 300% in a year or see the bottom drop out.

So now it seems that Dave has made it clear to NOT invest in cryptocurrency due to concerns about:

  • it being a volatile asset
  • lack of regulation
  • short track record of steady growth 

Dave Ramsey Investments

Dave doesn’t veer much from what he teaches people to invest in over the long haul. 

He recommends that we avoid high-risk investments with increased volatility promising higher returns.

He’s big on investing in lower risk assets that have a record of compound growth over the long term, such as mutual funds.

But his description of Bitcoin indicates that it doesn’t meet this criteria even though at the time of this writing, Bitcoin has a 200% annual growth for 10 years.

Yes, 10 years.

Seems fairly solid to me, but hey, I’m just a periodontist. What do I know about investing? 🙂

The Future Of Bitcoin

None of the financial experts know what the future holds.  It doesn’t matter if it involves stocks, bonds or the cryptoworld. 

The more I learn about Bitcoin, the more I like it. I’m NOT recommending you invest in it but if you’re interested, start your own due diligence.

I will forewarn you. It’s very easy to get sucked into the rabbit hole!

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