Suze Vs. Janet On Bitcoin

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Treasury Secretary Janet Yellen has sounded the alarm about Bitcoin

NEW YORK, NEW YORK – FEBRUARY 24: (EXCLUSIVE COVERAGE) Personal financial commentator and author Suze … [+] Orman surprised the financial world when she announced in an interview this week, “I love Bitcoin!”

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and cryptocurrency. At a conference in late February, Yellen described Bitcoin as “an extremely inefficient method of conducting transactions” and a “highly speculative asset”. She also claimed – without evidence – that she feared “it is often used for illicit finance.” Yellen made similar charges against the cryptocurrency as a whole during its January confirmation hearing.

But to paraphrase a famous 1970s commercial for a now defunct stockbroker, when Janet Yellen talks about Bitcoin, a lot of people in the financial world don’t seem to be listening. Instead, they listen to companies like Square SQ, MicroStrategy MSTR, and Tesla TSLA who are investing their cash reserves in Bitcoin. And they listen to Citi analysts say in a new report that “Bitcoin is at the tipping point in its existence” and “could become the currency of choice for international trade.”

And now ordinary investors are listening to personal finance expert Suze Orman, who said to Yahoo Finance, in a segment that ran Thursday, “I love bitcoin!” She continued, “I like the universality of it. I like that it’s just there and that there are companies that invest in it. Orman added that she sees Bitcoin “as a possible replacement for gold as an investment”.

In the interview, Orman revealed that she “played” Bitcoin by investing in MicroStrategy last year and “went all the way up” as the company’s share price rose along with the value of Bitcoin, resulting in one A significant part of the company’s Bitcoin is equity investments. She even recommended Bitcoin to those who could afford to lose their investment through a Paypal PYPL account at $ 100 per month.

Orman warned that Bitcoin was “seriously risky” and told investors, “I wouldn’t invest in Bitcoin with money that I couldn’t afford to lose.”

Orman’s endorsement of Bitcoin is a blow to progressive critics of Bitcoin like Yellen, as Orman’s personal finance tips appeal to both red and blue. Indeed, Orman is a bit progressive himself.

In an interview with Yahoo Finance, she told host Andy Serwer that she loved Senator Elizabeth Warren (D-MA) “more than life itself” and that she supported Warren’s proposed “wealth tax”. However, Orman said she was concerned about whether the money raised through such a tax would be wisely spent by Congress. Skepticism about the impact of massive government spending and fears of impending inflation in a broad cross-section of Americans are major factors fueling the rise in Bitcoin and cryptocurrency, despite warnings from Yellen and other bureaucracy overseers.

Yellen’s claims that Bitcoin and cryptocurrency are “frequently” used for illegal funding have also been denied by a number of experts. In the Citi report, analysts found that the illicit use of Bitcoin decreased by 50 percent from 2019 to 2020, and illicit activities account for a very small proportion of cryptocurrency transactions in general. “Overall, just over 2% of cryptocurrency activity in 2019 was related to illegal activity, and by 2020 it was only 0.3%,” the report said.

As my colleague at the Competitive Enterprise Institute, Ryan Nabil points out, the traceability of cryptocurrency running on the public ledger blockchain system like Bitcoin and Ethereum makes it pointless to criminalize using cryptocurrency for many illegal purposes. Because of this traceability, law enforcement officers and private investigators can use publicly available information to investigate illegal funding, which could then serve as the basis for subpoenas and arrest warrants, according to Nabil. “

Ironically, government-issued paper bills are often easier to use than cryptocurrency for illegal transactions, as they are largely incomprehensible. Forbes fintech consultant Hailey Lennon writes, “If we really want to focus on where the money is, we should look at government-backed physical fiat.”

In fact, the cryptocurrency’s ability to be tracked was one of the five factors listed in the Citi report as to why Bitcoin might be the currency of choice for international trading. The advantages of Bitcoin are “decentralized and limitless design, lack of exchange rate risk, speed and cost advantages when transporting money, security of its payments and traceability”. This is the case with many cryptocurrencies, and therefore their use will continue to increase for the foreseeable future, despite the wagging of fingers by those in power.