As the host of a nationally acclaimed CNBC TV show, podcast, and author of 10 New York Times bestsellers on financial advice, Suze Orman’s opinions carry considerable weight in the public consciousness.

During her early days as a restaurant owner, a Merrill Lynch broker wiped out most of her savings due to unsuccessful options trading. The hard lesson prompted her to educate herself in the world of investments, and she subsequently worked her way through the financial industry, becoming Vice-President of Prudential Securities before forming her own financial consulting company. Appearances on Oprah Winfrey’s show led to her own 6-episode series on Oprah’s OWN, dramatically increasing her profile beyond the financial community, and making Suze Orman a household name throughout the US. She also does numerous guest appearances on other talk shows and podcasts.

Suze “Loves” Bitcoin – but Advises Caution….

 

Yahoo! Finance Editor-in-Chief Andy Serwer has a talk show podcast entitled Influencers. During an episode in which Suze Orman was the featured guest, the subject of Bitcoin came up. Serwer asked Orman about her opinion on Bitcoin, and Orman’s comments included a number of insights.

• Suze “loves” Bitcoin and compares it to a stock that she had a gut feeling about, which she bought at $125 and sold at $1,000, just as it started to fall in price. 
• She does not view Bitcoin as a medium of exchange, nor as a currency. 
• Suze sees Bitcoin as a volatile investment with a high upside potential.
• She also advises extreme caution with Bitcoin. Its inherent volatility makes it not unlike the options trading that nearly wiped her out decades ago. She opined that one should only invest money that he or she can afford to lose if considering Bitcoin.

Suze Knows Bitcoin’s History

The history of Bitcoin has certainly had twists and turns enough to rival soap operas. Suze Orman’s comments are informed by documented events.

Bitcoin has certainly been volatile, but with high upside potential. Since 2010, when it started trading at $0.09, it hit $1,200 in 2013, promptly dropped to the $30s, climbed as high as $20,000 in May 2018, fell to $6,635 by December, 2019, rose to $68,900 in November, 2020, plummeted to $18,000 23 months later, and then has soared as high as $73,800 this year.

While El Salvador is the only nation to date to adopt Bitcoin as legal tender, it has encountered difficulties in its implementation, and El Salvador is in ongoing discussion with the IMF on furthering reforms to ease its transition. 

The reliance on wifi for Bitcoin to be accessible as a medium of exchange is still a problem that Elon Musk’s Starlink can probably resolve. However, the political hostility expressed by Brazil, for example, against Musk for his free speech advocacy has led to asset seizure. Other countries with similar proclivities may attempt the same in the future. 

Bitcoin’s Risks – Both Internal and External

There are a number of unique risks inherent with Bitcoin, due to its unique blockchain design and reliance on the cyberworld.for it to function. There are also external forces that can negatively impact it. Both situations add to the overall hazards of Bitcoin as an investable asset. 

It is no secret that SEC Chair Gary Gensler has concerns with Bitcoin and cryptocurrencies in general. While resigned to admit that they are not securities, Gensler still insists upon the need for regulation of Bitcoin as recently as September 2024. 

Although not hacked directly into its internal blockchain, Bitcoin was the subject of the largest crypto hack to date: the Mt. Gox hacks of 2011 and 2014. On both occasions, Bitcoin was the target of the theft. Although the 2011 hack amount was $400,000, Mt. Gox handled 70% of Bitcoin transactions at the time. Mt. Gox lost both its own inventory as well as that of its clients to the tune of $473 million in value in the 2014 hack.

Although Bitcoin mining has been outlawed by the Chinese government, Chinese Bitcoin miners still control over 20% of Bitcoin mining operations, with a significant majority of them in Central China. China’s 22,500 MW Three Gorges Dam is a hydroelectric dam in Hubei province, and is the world’s largest power station, in terms of installed capacity. It is also exhibiting numerous signs of potential collapse in a number of sections that have not been successfully remediated. A collapse of the Three Gorges Dam would not only kill millions of inhabitants, but also wipe out over 20% of Bitcoin operations, and potentially damage and disable its blockchain integrity. 

Overall, Suze Orman’s advice on Bitcoin can be considered both prudent and informed, backed up by historical facts and common sense. 

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