Legendary American value investor William H. Miller III says Bitcoin is still “extraordinarily” early in its adoption cycle.
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.“
On April 16, while speaking at a panel (“Past, Present, Future of Bitcoin”) at the Texas A&M Bitcoin Conference 2021, Miller said:
“The problem it solves is how do you safeguard a portion of your assets from the vagaries of the financial system an especially a system which is monopolized by governments and those monopolies have a way of behaving in ways that are in their own personal interest.“
He also believes that probably fewer than 5% of high-profile tech investors own any bitcoins:
“Observing what’s happened with Bitcoin, I bet you wouldn’t find 5% of them that own Bitcoin… So it’s extraordinary early in the adoption cycle with Bitcoin.“
He went on to highlight Bitcoin’s scarce supply as a potential price multiplier:
“It’s the only economic unit that I’m aware of that is both infinitely divisible and instantly transportable, where the supply is completely separate from the demand. No matter what the demand is for Bitcoin the supply is 21 million. There’s an estimated 47 million millionaires in the world and so if each millionaire wanted one Bitcoin he or she couldn’t have it. They’d have to settle for something less.“