On Tuesday (April 20), legendary American value investor William H. Miller III shared his latest thoughts on Bitcoin.
Miller is the Founder, Chairman, and Chief Investment Officer of investment firm Miller Value Partners, as well as the portfolio manager of firm’s mutual funds “Opportunity Equity” and “Income Strategy”.
Before starting Miller Value Partners, Bill Miller and Ernie Kiehne founded Legg Mason Capital Management, and they worked as portfolio managers of the Legg Mason Capital Management Value Trust from its inception in 1982.
It is important to point out that Miller is not your average fund manager. As CNBC noted back in June 2018, Miller’s 15-year streak (through 2005) of beating the is S&P 500 is still a benchmark no active manager can touch.”
In his “4Q 2020 Market Letter” (published on January 5), Miller had this to say about Bitcoin:
“The Fed is pursuing a policy whose objective is to have investments in cash lose money in real terms for the foreseeable future. Companies such as Square, MassMutual, and MicroStrategy have moved cash into bitcoin rather than have guaranteed losses on cash held on their balance sheet. Paypal and Square alone are estimated to be buying on behalf of their customers all of the 900 new bitcoins mined each day.
“Bitcoin at this stage is best thought of as digital gold yet has many advantages over the yellow metal. If inflation picks up, or even if it doesn’t, and more companies decide to diversify some small portion of their cash balances into bitcoin instead of cash, then the current relative trickle into bitcoin would become a torrent. Warren Buffett famously called bitcoin ‘rat poison’. He may well be right. Bitcoin could be rat poison, and the rat could be cash.“
“There are many many different ways to look at Bitcoin. The simplest one is just supply and demand … Supply’s growing 2% a year and demand is growing faster. That’s all you really need to know, and that means it’s going higher. So… it’s gonna have these kinds of volatile days. It was down 20% peak-to-trough over the weekend…
“With Bitcoin, volatility is the price you pay for performance, and I think that it’s like digital gold… it is a much better version as a store value than gold… And then there’s $15 trillion of negative yielding bonds out there… Why would you have that when you can own something that at least has has the potential to go up?“
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.