Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.
Arabella from Springfield, Missouri called into “The Ramsey Show” because she was facing a financial fork in the road.
With about $60,000 in cryptocurrency, $14,000 in student loans and $37,000 in auto debt, she and her husband were preparing to close on their first home.
Her question to financial guru Dave Ramsey: Should they liquidate their crypto holdings to become debt-free before taking on a mortgage, or hold out for the market upswing that many in the crypto world are anticipating?
“I wouldn’t try to time the market with it,” co-host Jade Warshaw said. “You guys are in debt today, and you’re closing on the house really quickly. So, I would liquidate this crypto, and I would pay off this debt. I would do that instantly.”
Ramsey didn’t mince words about the digital currency’s risks either.
“It’s one of the most volatile, high-risk investments on the planet. And it’s not technically an investment, it’s actually called speculation.”
Arabella said that the digital coins they hold aren’t meme tokens, but admitted their portfolio was worth $30,000 more before President Donald Trump’s tariff announcements.
“And so what happens when Trump burps again? You’re screwed,” Ramsey said.
Ramsey and Warshaw emphasized that investing in the cryptocurrency market is more like gambling than wealth building, especially when the assets are held instead of used for paying off loans.
“It’s the roll of the dice. You’re in Vegas, and your car payment’s on the line,” Ramsey said.
He also used a sunk cost analysis to help Arabella reframe her thinking: If she had no debt, would she borrow against her car and on credit cards to buy $60,000 worth of crypto? Arabella responded, “Absolutely not.”
“It’s the same thing.” Ramsey said. “If you don’t sell it today, you’ll borrow it again tomorrow.”
Instead of riding market swings on risky bets, consider putting your money into consistent, low-cost investments. After all, starting early and building your investments a little at a time can pay dividends later.