Dave Ramsey warns Americans to avoid major investment mistake | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Traditional financial markets have evolved to include digital assets, the most popular being digital currencies. Younger investors in particular have been drawn to Bitcoin for its decentralized nature, high growth potential, and embrace of technology.

As the stock market has become more volatile and unpredictable, Bitcoin’s popularity has grown tremendously.

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However, digital currencies are still very a new asset class, with considerable downside risk, market manipulation, and security concerns over fraud. Heightened risk has called Bitcoin’s long-term viability into question.

In an exclusive interview with TheStreet, best-selling personal finance author Dave Ramsey shares why he believes investors should proceed cautiously with Bitcoin — especially when retirement plans are on the line.

Bitcoin and digital assets have become increasingly popular alternatives to traditional investments like stocks and bonds, but Dave Ramsey warns of the risk of new financial products.

Image source&colon; Spencer Platt/Getty

Dave Ramsey reveals why investments should be looked at through a long-term lens

Over $8 trillion of U.S. equity market cap has been lost from January to April of this year from increased market volatility. Heightened political and economic uncertainty have made investors — particularly younger ones — wary of traditional financial portfolio performance.

Americans in their twenties lost an average of $11,000 in their 401(k) balance, while those in their thirties lost around $23,000 during the stock market plunge in April.

Investors seeking higher returns and an alternatives to financial products tied to the U.S. dollar have flocked to Bitcoin in droves. However, Dave Ramsey highlights that Bitcoin has proven to be equally as volatile as the stock market, if not more.

More on retirement:

“Investing is a long-term time horizon. The track record on Bitcoin is non-existent because it’s only been in existence for just a few years,” Ramsey said. “And when you look at it and chart the volatility of it during that time, it’s crazy — it’s just nuts. So it’s definitely a gamble, it’s speculation.”

While Ramsey believes that Bitcoin will stabilize eventually, it’s still a significant gamble due to its recent emergence.

“If you want to speculate with some of your money and you like Bitcoin, fine, I think Bitcoin is here to stay,” he continued. “I think it’s going to stabilize. It’s going to become more and more legitimate, less and less volatile. I’m not scared of that part of it.”

Dave Ramsey explains why Americans shouldn’t gamble their 401(k) and retirement plans on Bitcoin

Planning for retirement is a decades-long process, requiring a consistent, long-term approach. Most financial experts recommend holding investments, and retirement accounts in particular, as they are.

Market dips typically have a way of rebounding in the long run, so investors who hold their positions tend to recoup most losses.

Ramsey explains why new alternative investments like Bitcoin should still be seen as incredibly high-risk, and are too unpredictable to gamble your retirement on.

“Bitcoin is not a long-term investment — there’s not enough track record to call it that. So if you say it’s an investment, I would say, ‘No, it’s wacko.'”

“If you want to speculate in it and put some money in the middle of the table and play on the roulette wheel, that’s fine,” he continued, “But don’t put your whole 401(k) in or think, ‘I’m going to retire well if I put all my money in Bitcoin.'”