Why This Legendary Billionaire Investor Is All About Crypto

[ad_1]

Image source: Getty Images

Bill Miller is one of the most successful investors of all time, and Bitcoin is the best investment he recommends.

Key Points Bill Miller, a fund manager who has beaten the S&P 500 15 years in a row, holds about 50% of his personal assets in Bitcoin and other cryptocurrencies. According to Miller, his investment in Bitcoin is one of the reasons he is now a billionaire. He recommends investors place 1% of their portfolios in Bitcoin to diversify with minimal risk.

Cryptocurrency is, to put it lightly, a divisive topic among the investor elite. Many big investors are staunchly anti-crypto, with Warren Buffett being the most prominent example. On the other end of the spectrum is fund manager Bill Miller, who believes in bitcoin (BTC) and crypto so much that they make up half of his personal assets.

Miller is a value investor, but he has always taken an unorthodox approach and been more open to risk. In perhaps his most unorthodox move, he became a self-proclaimed Bitcoin bull. And after a year of bitcoin beating all stocks, he recommended it to all investors.

A Remarkable Investing Career and Early Bitcoin Adoption

For more than a decade, Bill Miller has been the investing world’s version of a rock star. He was the fund manager of Legg Mason and his portfolio beat the S&P 500 for 15 consecutive years, from 1991 to 2005.

This is not an easy task. Beating the market for even a single year is impressive. Most years, 80% of large-cap funds fail. Beating him for 15 years in a row would be unheard of, if it weren’t for Miller.

All this success came to an end with the financial crisis. His portfolio suffered massive losses and he clung to losing investments after several of his peers abandoned them. If you’ve seen the movie “The Big Short,” you might remember a scene depicting one of Miller’s lowest moments. This version of him was a character named Bruce Miller, a stereotypical Wall Street braggart who proclaims he fully believes in Bear Stearns even as the bank’s value plummets.

Miller may not have seen the writing on the wall during the financial crisis, but he understood the value of crypto before most of Wall Street. He says he started buying Bitcoin for his personal wallet in 2014 when it cost around $200. The hedge fund he manages was investing in Bitcoin in 2017, at a time when many financial executives were calling the cryptocurrency a dumb investment. And he started buying it for himself again in the spring of 2021 during a price drop.

In addition to Bitcoin, Miller is also heavily invested in Amazon, which he began buying shortly after its IPO. These two assets now make up the bulk of his portfolio. According to Miller, they also made him a billionaire.

READ MORE: Best Cryptocurrency Apps for 2022

Bitcoin is Miller’s #1 Recommended Investment

In a recent interview, WealthTrack asked Miller the #1 investment he recommends for a long-term portfolio. His response was Bitcoin.

He suggests investors put 1% of their portfolios in Bitcoin. The logic behind this is that even in the unlikely event that Bitcoin lost all of its value, you would only have lost 1% of your wallet.

Why does Miller think Bitcoin is a good investment? He gave several reasons:

The supply is limited, as there will only be 21 million bitcoins. He thinks that the demand will exceed the supply and will continue to drive the price up. It is superior to gold as a store of value. While gold is large and hard to split, Bitcoin is digital, highly divisible, and can be sent anywhere in the world with ease. It protects people against a government monopoly on money and banking. He called Bitcoin insurance against financial catastrophe. It is underused. Bitcoin has yet to gain widespread adoption, which leaves plenty of room for it to grow. It offers extremely high potential returns. Miller suggested that Bitcoin is the rare asset whose price can rise 10 to 50 times. Should you take Miller’s advice and buy Bitcoin?

Bitcoin can be a great addition to your portfolio, but I wouldn’t say everyone should invest. Those who are new to this field should first educate themselves on how cryptocurrency works before deciding to get involved. And if you don’t like volatility, crypto probably isn’t the best bet.

For investors looking to diversify, crypto is definitely worth investigating due to the potential returns. Bitcoin is a popular choice, especially when you’re new to crypto because it’s the biggest. However, there are also cryptos that could grow faster than Bitcoin, so it is worth researching other crypto investments as well.

If you’re considering buying crypto, Miller’s suggested strategy is a smart one. Put only a small portion of your portfolio in crypto so the volatility can’t wipe you out. Miller mentioned 1%, but that depends on your risk tolerance. For most investors, a solid rule of thumb is to dedicate no more than 5-10% of your portfolio to these types of high-risk assets.

Lyle Daly owns Bitcoin. The Motley Fool owns stocks and recommends Bitcoin.

Buy and sell cryptos on an exchange selected by experts

There are hundreds of platforms around the world waiting to give you access to thousands of cryptocurrencies. And to find the right one for you, you’ll need to decide which features appeal to you the most.

To help you get started, our independent experts have sifted through the options to bring you some of our best cryptocurrency exchanges for 2021. Check out the list here and start your crypto journey today.

[ad_2]