Suze Orman Says Keeping Crypto in a Retirement Account Is a Big Mistake. Here's Why

It could be a move you sorely regret.

Although it's been a rocky year for cryptocurrency, many investors are still eager to put money into digital coins or hold onto the digital currency they bought last year. If you're interested in buying cryptocurrency, it's okay to do so as long as you understand the risks involved and tread lightly. That means not putting 80% of your money into crypto, but rather, starting small and seeing how that goes.

But if you ask Suze Orman, she'll tell you that investing in cryptocurrency for retirement is a really bad move. And it's advice worth heeding.

An asset that's just too speculative

You'll often hear that it's smart to consistently fund an IRA for retirement so you have money to tap later in life. And you don't want to just leave your retirement savings in cash. Rather, you should be investing that money so it can grow into a larger sum over time.

It's also important to maintain a diverse mix of investments for retirement. That could help you enjoy gains and minimize losses during periods of volatility.

But if there's one asset Suze Orman would caution retirement savers to stay away from, it's cryptocurrency. The reason? It's highly speculative.

Crypto has proven itself to be very volatile, but then again, so have stocks. But whereas stocks have been around for a long time, cryptocurrency has only been around for a little more than a decade. And it's questionable as to whether it will still be an asset of value in a decade from now.

It's easier to determine the value of a given stock based on information on the company behind it -- namely, by looking at that company's assets, cash flow, products, and so forth. It's harder to figure out what cryptocurrency is worth, and what it will be worth in the future.

One of the biggest question marks surrounding cryptocurrency is whether it will become a widely accepted form of payment. Some merchants already accept crypto payments today. But for the most part, you can't just pay in crypto the same way you can hand over a wad of cash or swipe a debit or credit card.

That makes cryptocurrency pretty risky -- more risky than stocks. If cryptocurrency doesn't become a mainstream payment option at some point in the future, its value could plummet.

We also don't know to what extent cryptocurrency will be regulated over time. That, too, adds to the risk of owning it.

Look to cryptocurrency as a shorter-term asset

As a general rule, it's a good idea to load up your portfolio with quality investments you hold for a long time. But crypto may be the exception to the rule. It may be a better bet to think of cryptocurrency as a shorter-term asset, and stick to investments that are more tried and true for your retirement nest egg.

You're going to need a sizable amount of savings to cover your living costs once your career ends. And you don't want to put your future financial security at risk by banking too heavily on crypto.