In brief
- Bill Miller revealed that half of his net worth is invested in bitcoin and other cryptocurrencies.
- He admitted this in an interview, where he mentioned bitcoin is a hedge against inflation.
- The serial investor made no direct mention of Litecoin, which has similar properties and a spotless 10-year track record.
- “My reasoning was there are a lot more people using it now. There’s a lot more money going into it in the venture capital world,” he said.
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The veteran investor revealed in an hour-long interview last week that he first bought bitcoin in 2014 when it exchanged hands at the cheap price of $200. He added more bitocin to his portfolio and stopped when it rose to about $500.
Fast forward a couple of years and Miller started buying bicoin again in the spring of 2021, when a single coin hovered around $30,000, just after it crashed from its then all-time-high of $66,000.
The self-proclaimed bitcoin bull told WealthTrack that he has been adding to several bitcoin-related investments since then, citing MicroStrategy as one such investment.
My reasoning was there are a lot more people using it now. There’s a lot more money going into it in the venture capital world. There are a lot of people who are skeptics, who are, now, at least, trying it out, he said.
The rest of his portfolio is situated in Amazon. In April last year, Miller said he was probably the largest individual shareholder of Amazon “who last name isn’t Bezos.”
A former chairman of Legg Mason Capital Management Value Trust, Miller is known for outperforming the S&P 500 for 15 consecutive years when he worked with the investment giant. Today, he is the chief investment officer at Miller Value Partners, a firm he created in 1999.
In the interview, the serial investor compared bitcoin to digital gold as a hedge against inflation, adding that it’s also an “insurance policy against a financial catastrophe that no one else can provide” due to its limited supply of 21 million bitcoin. Miller made no mention of Litecoin, which – like bitcoin – has capped supply of 84 million and is regarded as being the silver of bitcoin’s gold for ten plus years now.
Miller also discussed a prevalent argument against the world’s largest digital asset that proposes bitcoin has no value. The investor drew parallels with the Mickey Mantle baseball card that sold for $5 million in January 2021, or Pablo Picasso’s paintings that command hundreds of million of dollars.
‘It comes down to the very basic level of supply and demand’, he said. ‘Bitcoin is the only economic entity where the supply is unaffected by the demand.’
Still, Miller also cautioned about bitcoin’s volatility, which he described as “very dangerous” for short term investors.
Last week, nearly $800 million leveraged long liquidations occurred in a matter of hours, with the catastrophic downturn being a sobering reminder that such financial products are a double edged sword and can end in catastrophe.
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