It came as a shock to many of her fans, but financial advisor and author Suze Orman gave a strong endorsement to Bitcoin. She says she loves it, thinks it’s a legitimate investment that could possibly replace gold, and that people should absolutely be buying it. She has also recommended buying Bitcoin on PayPal in small chunks that you could afford to lose since it’s so volatile.
Orman seems to have a rudimentary understanding of Bitcoin, so it’s wise to take her thoughts on the subject with a grain of salt. She does make some good points overall, although there’s one piece of advice you may want to discard.
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What Suze Orman gets right about Bitcoin
While some financial personalities have been quick to write off Bitcoin, Orman sees it as an investment — albeit a high-risk one. That’s a fair stance to take.
Bitcoin’s price has been a rollercoaster ride, but if you look at the results over a period of years, it has achieved incredible growth. You won’t find many investments that have gone from a price of under $500 to over $60,000 in less than five years. At the same time, it’s certainly risky. The price can swing by 10% or more at a moment’s notice, and we’re also talking about something that has only been around for a little over a decade. We don’t have over a century of data to look at like we do with the stock market.
Orman suggests dollar-cost averaging, which means putting a set amount into Bitcoin at fixed intervals, using money you can afford to lose. Her example is $100 per month. And she recommends holding it as a long-term investment.
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Dollar-cost averaging can be a smart strategy, especially with volatile investments. If the price of Bitcoin dips, you can buy low. You wouldn’t be able to do that if you had put all your money into it at once.
If you are going to buy Bitcoin, view it as a long-term investment like Orman suggests. Since it’s so volatile, you don’t want to get caught up in the daily price changes.
Don’t take Orman’s advice on how to buy Bitcoin
When it comes to getting started buying Bitcoin, Orman recommends PayPal. She says that’s what she uses because it’s easy and doesn’t charge big fees. She also mentioned that she used the Coinbase exchange in the past, but she couldn’t withdraw her money, and she didn’t understand crypto wallets and secret keys.
Despite PayPal’s popularity as a payment app, it’s not the best place to buy cryptocurrency. You can do very little with crypto you’ve bought on PayPal, and you can’t even transfer it off the app to your own crypto wallet.
If you buy Bitcoin through top cryptocurrency exchanges, it’s yours. You can send it to other people, use it to make purchases, or transfer it to crypto wallets. In fact, moving your crypto to a wallet is an important security measure. If you leave it on the exchange where you bought it, then the exchange controls your coins. That could be a problem if either your account or the exchange is hacked, or if the exchange freezes your account.
With PayPal, the only things you can do are buy and sell. It also lets you pay with crypto at checkout, but it’s essentially just selling your crypto for fiat money, and then using that money for the purchase.
It’s better to buy Bitcoin through a cryptocurrency exchange that gives you full control over what you buy. There are several exchanges that work well for beginners, including Coinbase and Gemini.
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Orman may not be that knowledgeable about Bitcoin, but her stamp of approval is still good for crypto. It could encourage new investors who otherwise wouldn’t have gone near Bitcoin. If you’re thinking of getting into crypto after Orman’s suggestion, it’s worth learning more about the subject and then making an investment if you like what you read. Just start small, only put in what you can afford to lose, and try buying with a reputable exchange instead of PayPal.
View more information: https://www.fool.com/the-ascent/buying-stocks/articles/why-suze-orman-says-you-should-absolutely-be-buying-bitcoin/