Finance expert Dave Ramsey frequently gives solid advice on paying down debt, creating a budget and building an emergency savings account. But is Ramsey always right?
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He recently warned against investing in crypto. “Crypto is not a safe investment,” he wrote on the Ramsey Solutions blog. “Yes, some people made lots of cash investing in crypto, but it’s all based on speculation — which is just a step above gambling.”
Ramsey cited an unproven rate of return, lack of regulations and security concerns as just a few of the downfalls of cryptocurrency. But many investors disagree, pinpointing certain crypto coins as viable investments, especially in light of President Trump’s support of deregulated finance.
“A Trump administration openly supportive of crypto could reduce regulatory uncertainty,” said Felix Xu, co-founder of Bella Protocol and ARPA Network. “Clarity tends to attract institutional capital, potentially expanding market depth and fueling innovation.”
“For many people, they either truly believe [in crypto], or they truly don’t,” said CK Zheng, co-founder and CIO of ZX Squared Capital. “For people who don’t believe it, I come back to what one of my professors at the University of Chicago used to say: ‘The data does not lie.’ For those who don’t believe, I say look at the data.”
In the past six months, Bitcoin has risen $38,222 per coin, even breaking the $100,000 mark in mid-December 2024. It’s down from that high in the past month. Ethereum, the largest alt-coin based on market cap, broke $4,000 following the election and is down in the $3,000 range once again.
Similarly, the meme coin Doge jumped up in November following the election, although it still hasn’t broken 50 cents.
With this in mind and with Trump set to take office shortly, the timing could be right for investors with high risk tolerance to gain exposure to the coin of their choice.
Zheng, who comes from a traditional finance background, expanded upon how to analyze the data, even though crypto is a relatively new investment.
“The stock market has 100 years of data,” Zheng said. “For crypto, you can get 10 years of data. Ten years is not long to study compared to 100 years, but the math is simple.”
He pointed out that if you allocated 60% to equity and 40% to fixed income, in the last 10 years, you’d get a return of about 80% per year. “That’s average return,” he said. “It’s a boring portfolio, but for a lot of retirees, it’s okay.”
However, he noted that if you had taken just 5% of that investment 10 years ago and put it into Bitcoin, your portfolio would have yielded cumulative returns of 160%. “If you knew that 10 years ago, it’s a no-brainer,” he said.
Zheng continued, “The question becomes: ‘How do I know the same thing will happen the next 10 years?’ Well, you can ask yourself the same question about the stock market. How do you know the next 100 years will be the same as the last 100 years? You don’t. But I’d rather be open-minded, because [otherwise], you potentially could lose a big opportunity.”
Zheng also provided another comparison to traditional finance: Bitcoin as a store of value.
“If you think about gold today, nobody is questioning that gold stores value,” he said. “But thousands of years ago, when the West brought gold to Asia to trade, they didn’t know gold would be a store of value.”
Today, many investors acknowledge Bitcoin as “digital gold,” an asset that represents a specific value and can be used for the exchange of goods and services. Xu pointed out, “With a capped supply of 21 million coins, Bitcoin’s scarcity underpins its narrative as digital gold.”
Potential policy changes under the incoming Trump administration could enhance Bitcoin’s role in trade.
“Under a Trump administration that could reduce regulatory hurdles, Bitcoin might gain further legitimacy — especially if policies encourage accumulation of strategic crypto reserves or foster a more accommodating environment for Bitcoin ETFs and custody solutions,” Xu said. “This could strengthen Bitcoin’s role as a store of value and a digital gold, making it even more attractive to both institutional and retail investors.”
Meanwhile, he pointed out, policy changes could also positively affect the alt-coin market. “If U.S. regulators relax certain restrictions, streamline token listing processes, or even encourage the integration of blockchain in traditional finance, altcoins could see a wave of institutional and retail interest,” Xu said.
With all this in mind, the question becomes, which cryptocurrencies make the best investments?
Zheng divided cryptocurrencies into three buckets, once again drawing parallels to the stock market. The first bucket, in a class by itself, is Bitcoin. It holds the majority of market share and is the original coin. “Bitcoin is like Apple,” Zheng said, referring to one of the large cap tech stops that dominates the S&P 500.
He placed well-respected altcoins like Ethereum and Solana in the second bucket. “These would be like Microsoft, which establishes the infrastructure for IT,” Zheng said. Xu expanded upon the analogy. “With increased regulatory support, altcoins that deliver real-world solutions, like enhanced interoperability or more efficient scaling of existing networks, may shine.”
Just as you would choose a tech stock based on company fundamentals, when purchasing altcoins, Xu advised, “look for transparent roadmaps, reputable development teams and code audits.”
Finally, the last bucket, encompassing Dogecoin and a host of other smaller coins, should be viewed in the same light as meme stocks like AMC and GameStop. These are speculative, short-term investments that can help investors with very high risk tolerance make a lot of money, but there’s also a chance of tremendous losses.
Referring to Dogecoin, specifically, Zheng said, “It’s a speculative investment. It’s clearly influenced by celebrities, and the population that owns it is smaller. If I had a choice to buy Bitcoin vs. Dogecoin, I’d feel much safer with Bitcoin as a long-term investment.”
Whatever crypto you choose, the traditional caveats to investing still apply, experts warn. “A more pro-crypto environment doesn’t eliminate the need for due diligence,” said Xu. “[D]on’t overexpose yourself to a single asset. Diversify and only invest what you can afford to lose.”
