Why Financial Expert Suze Orman Believes Everyone Should Invest in Bitcoin

Take a look at bitcoin's price chart, and it's easy to see the appeal for investors. The largest and most widely traded cryptocurrency is up 118% over the past 12 months, with returns that have been astronomical since its inception in 2009.

However, many traditional investors remain skeptical. Financial podcaster Dave Ramsey has compared investing in bitcoin to buying the unstable Iraqi dinar, suggesting that its volatility makes it a risky investment. Warren Buffett has also criticized bitcoin, stating he wouldn't pay $25 for the entire world supply, as it doesn't produce earnings or cash flow.

In contrast, Suze Orman, a well-known financial expert and host of the podcast "Women & Money (and Everyone Smart Enough to Listen)," advocates for including bitcoin in your investment portfolio. She states, "Everybody should absolutely have exposure to bitcoin." Orman acknowledges the risks, advising investors to only invest what they can afford to lose.

Orman's Case for Holding Bitcoin

Crypto enthusiasts provide various reasons for investing in bitcoin, such as its potential as a store of value and a hedge against inflation. However, Orman believes that bitcoin's true value lies in its growing popularity among younger generations, who are likely to drive demand and increase its value over time. "As younger people make more money, bitcoin will be one of their investments of choice, causing it to go up," she asserts.

With 70% of cryptocurrency ownership belonging to millennials and Gen Z, Orman suggests that bitcoin is a speculative asset driven by investor demand rather than fundamentals. She emphasizes the potential for significant returns, stating, "This is an investment that you're either going to lose it all, or you're going to let it run until it's worth $100,000 or $200,000."

Keep the Risks in Mind

Orman stresses the importance of understanding the risks involved with investing in bitcoin. She recommends two key strategies:

1. Only invest what you can afford to lose, suggesting that high-risk assets should not exceed 5% of your investable funds.
2. Consider investing in a bitcoin spot exchange-traded fund (ETF) for added security, as it offers a more manageable way to own bitcoin without the complexities of digital wallets.

Ultimately, Orman prefers the simplicity of seeing her crypto investments alongside traditional assets in her portfolio, reinforcing her belief that while bitcoin is volatile, it can be a valuable addition to an investment strategy.