In a recent interview, legendary American value investor William H. Miller III shared his latest thoughts on Bitcoin and altcoins.
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”, 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.“
According to a report by Cointelegraph, during a interview with author William Green, Miller said that he was bullish on Bitcoin and called the asset a “lot less risky” at current prices than in prior years. Miller, who has taken the stance that Bitcoin is a modern form of digital gold, has been an active investor in crypto for over half a decade.
This report also mentioned that Miller dedicated roughly 30% of his portfolio to Bitcoin in 2016, when the price averaged $500, and that recently Miller had filed a motion with the U.S. SEC for Miller Opportunity Trust to invest in Bitcoin via Grayscale’s GBTC.
Miller apparently told Green:
Bitcoin is a lot less risky at $43,000 than it was at $300. It’s now established, huge amounts of venture-capital money have gone into it, and all the big banks are getting involved.
Miller went on to give his opinion of altcoins, saying that relatively few other projects would manage to find lasting success alongside Bitcoin and Ethereum. Miller predicted market volatility would result in a massive turn over for altcoins, with the majority falling to the wayside:
There are 10,000 various tokens and stuff floating out there. The chances of more than a handful of them being worthwhile is very, very small. Bitcoin, ethereum, and a few others are probably going to be around for a while.
Miller also stated that the NASDAQ-listed crypto exchange Coinbase offered a potential investment opportunity for value-oriented investors, saying that Coinbase stock (COIN) held a “default position for growth investors.” Miller said it was possible Coinbase’s stock could grow to surpass Tesla’s market capitalization of $790 billion by capitalizing on a “rapidly growing, changing industry.”
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.
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