Value investor Bill Miller said Friday that he believes bitcoin ownership is going to be a safer investment decision as the higher the price of the digital coin gets.
Bitcoin traded more than $ 40,000 per coin on Friday afternoon, after posting a record high of nearly $ 42,000 earlier in the day. The cryptocurrency has been raging since March, which will coincide with governments around the world making massive stimulus efforts to offset the impact of the pandemic coronavirus infection.
“He gets less risk the higher he goes” because he’s still early in the adoption cycle, Miller told “The Exchange.” “That’s the opposite of what happens with most stocks.”
“Total Bitcoin supply is growing at less than 2% per year and it is clear from the price that demand is growing much, much faster than that. As far as that is concerned, it seems bitcoin will go higher and possibly significantly higher, ”said Miller, founder and chief investment officer of Miller Value Partners.
Miller, who managed assets that beat the S&P 500 for just 15 years while at Legg Mason, said he did not have a specific price target for bitcoin but had a “price expectation”.
“I think bitcoin … should be up 50% to 100% of this in the next 12 to 18 months. And if you asked me more or less, I’d say for sure that It ‘s much more likely to do that will be higher than lower, “he said.
Vulnerability as usual
Bitcoin has undergone dramatic corrections in the past, and Miller warned investors that the cryptocurrency’s volatility is unlikely to go away anytime soon, even as more cryptocurrencies gain. institutional investment behind it. “I think if you can’t take that, maybe you shouldn’t have bitcoin,” he said.
“Bitcoin tends to move in spurts, which tend to be followed by corrections,” Miller said. “I think three 80% corrections have been made, which is typical in this very early type of technology with a very, very large navigation market.”
The price of bitcoin has gone up strongly, especially during the fall and into the new year. Since September 1, the value of digital coins has risen by about 230%.
Further adoptions from institutional investors have been credited with helping fuel the rise, with the likes of Paul Tudor Jones and Stanley Druckenmiller positioning bitcoin as a strong hedge against inflation. Rick Rieder at BlackRock in November visited it as an alternative to gold.
Miller, for his part, has owned the cryptocurrency for years.
In January 2018, Miller told CNBC that he started buying bitcoin around 2014 or 2015 at an average cost of $ 350 per coin. At the time, he said he had transferred his bitcoin holdings to a separate fund. On Friday, Miller said that was still the case, but explained that he hopes to implement regulatory changes to make it easier to be his main asset.
“We own bitcoin in a partnership started by my partner, Samantha McLemore, recently called Patient Capital, and it’s about a 5% position in there,” he said. “We don’t have it in the fund because it’s very, very difficult to do that. We’re currently looking at the regulatory aspects of that and considering the SEC allowing us to allow that to make us our assets. “