The American investor, fund manager, and philanthropist Bill Miller said he had distributed half of his personal wealth in bitcoin. The former Chairman of Legg Mason Capital Management stated he purchased “a fair amount” last year when the asset’s price dipped to $30,000.
50% of His Portfolio in BTC
Even though he was not supportive of bitcoin in the past, Miller has become one of its most prominent advocates recently. Over the past couple of years, especially after the start of the COVID-19 pandemic, the 72-year-old fund manager has often shown his support towards the leading digital asset and the cryptocurrency industry. He did it once again during a recent interview for “Wealthtrack.”
Asked why bitcoin is such a valuable investment tool, Miller argued this is so because it “can’t be touched by the government.” He added that its decentralized network records every transaction, and it’s immutable. Bitcoin could also be viewed as an “insurance policy,” which is why citizens of many countries with shuttered economies and monetary issues turn to it:
“If you have it, the government can’t take it away from you.”
The US investor admitted he first bought bitcoin around seven years ago when its price was hovering around $200. His main stash, though, was accumulated during the significant dip last summer when BTC plunged from nearly $65,000 to $30,000 in a few months.
Miller opined that there are many more people now who use bitcoin as well, as a lot more money is concentrated in the crypto industry. In line with this, he decided to allocate 50% of his portfolio to it.
Nonetheless, the investor warned about BTC’s volatility, saying it could be “very dangerous” for short-term investors. Speaking about long-term holders, though, the asset seems like the right investment tool as it has always managed to overcome its price drops.
BTC Is Better Than Gold
Miller also described bitcoin as the better equivalent of gold. He highlighted that people often turn their sight towards the precious metal instead of fiat currencies during a financial crisis. BTC is equal to gold, with the difference that the “government cannot take it away from you,” as Roosevelt’s administration confiscated people’s gold back in the 30s, he reminded.
He also outlined BTC’s significant price increase in a short period of time compared to the yellow metal’s relatively stagnant value:
“In 5,000 years, the gold has gone from a nickel to $1,850. In 10 years, bitcoin has gone from a nickel to $57,000. So why would I own gold?”
A few months ago, the legacy investor made a compelling comparison between the two assets. He said bitcoin resembles a sports car like Ferrari, while gold is old-fashioned – like a “horse-and-buggy.”
Buffett Is Wrong
Subsequently, Miller opposed Warren Buffett, who believes the primary cryptocurrency is a “rat poison” with no intrinsic value. The former opined that bitcoin is “the only economic entity where the supply is unaffected by the demand.”
Back in the days, nearly no one knew how the Internet could affect society, but now everybody can see what the network is capable of, Miller said. Similar to it, humanity is yet to realize what bitcoin’s merits will be in the future.
There is one thing that Warren Buffett often states, which Miller finds true, though: that fear is contagious, and it spreads rapidly, while confidence only returns slowly one person at a time. According to this principle, people overreact to adverse events meaning that bitcoin’s recent price drop could be viewed as a “perfect buying opportunity,” he concluded.
Featured Image Courtesy of CNBC