Legendary investor Bill Miller backs Bitcoin, less bullish on surviving Altcoins

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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 Miller Value Partners investment firm, as well as the portfolio manager of the Opportunity Equity and Income Strategy corporate mutual funds.

Prior to founding Miller Value Partners, Bill Miller and Ernie Kiehne founded Legg Mason Capital Management, and they have worked as portfolio managers of the Legg Mason Capital Management Value Trust since its inception in 1982.

It’s important to point out that Miller is not your average fund manager. As CNBC noted in June 2018, Millers’ 15-year streak (through 2005) of beating his S&P 500 is still a benchmark that no active manager can touch.

In his 4Q 2020 market letter, Miller said this about Bitcoin:

The Fed is pursuing a policy aimed at making cash investments lose money in real terms for the foreseeable future. Companies such as Square, MassMutual, and MicroStrategy have transferred money into bitcoin rather than guaranteed losses on cash held on their balance sheets. It is estimated that Paypal and Square alone buy on behalf of their customers all of the 900 new bitcoins mined each day.

At this point, Bitcoin is best viewed as digital gold, but has many advantages over the yellow metal. If inflation increases, or even if it doesn’t, and more companies decide to diversify a small portion of their cash balances into bitcoin rather than cash, then the current relative runoff in bitcoins would become a torrent. Warren Buffett called the rat poison Bitcoin. He might be right. Bitcoin could be rat poison, and the rat could be cash.

According to a report by Cointelegraph, during an interview with author William Green, Miller said he was bullish on Bitcoin and called the asset much less risky at current prices than in previous years. Miller, who has taken the position 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 devoted around 30% of his portfolio to Bitcoin in 2016, when the average price was $ 500, and that Miller recently filed a petition with the US SEC to have Miller Opportunity Trust invest in Bitcoin through Grayscales GBTC.

Miller apparently told Green:

Bitcoin is much less risky at $ 43,000 than it was at $ 300. It’s now established, huge amounts of venture capital money has been put into it, and all the big banks are getting involved.

Miller then gave his opinion on altcoins, saying that relatively few other projects would find lasting success alongside Bitcoin and Ethereum. Miller predicted that market volatility would lead to a massive rotation of altcoins, with the majority falling by the wayside:

There are 10,000 different tokens and stuff floating around there. The chances that more than a handful of them are worth it are very, very low. Bitcoin, ethereum, and a few others are probably going to be around for a while.

Miller also said that the NASDAQ-listed crypto exchange Coinbase offers a potential investment opportunity for value-oriented investors, saying Coinbase (COIN) stock holds a default position for growth investors. Miller said it was possible that Coinbases’ stock could grow to exceed Tesla’s market cap of $ 790 billion by capitalizing on a growing and evolving industry.

Disclaimer

The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing or trading crypto-assets carries a risk of financial loss.

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