In Brief:
- Legendary investor Bill Miller puts half of his own net worth into bitcoin and other cryptocurrencies.
- Miller no longer considers himself just a “Bitcoin observer” but rather a real Bitcoin bull.
- Miller considers Bitcoin to be an “insurance policy against a financial catastrophe”.
Bill Miller, a legendary investor, recently revealed that he had half of his own net worth invested in bitcoin and other cryptocurrencies, contradicting his widely held advice that investors should only dedicate 1% to 2% of their portfolios to digital assets.
According to a nearly hour-long interview with WealthTrack on Friday, Miller originally purchased bitcoin in 2014, when it was trading at $200, after hearing a talk by Wences Casares, known as the “Patient Zero” of bitcoin for introducing it to Silicon Valley circles. He continued to buy more until the price reached around $500.
Miller no longer considers himself just a “Bitcoin observer” but rather a real Bitcoin Bull. He has been adding to various bitcoin-related investments since then, citing MicroStrategy as one of them. Miller said in an interview that he was likely the largest individual shareholder of Amazon “whose last name isn’t Bezos.”
Bitcoin, according to the billionaire investor, is a “insurance policy against a financial catastrophe” as well as a great investment tool that has outperformed gold. Bitcoin, according to Miller, could be conceived of as “digital gold” with a strictly limited supply.
Miller, the Founder and Chief Investment Officer of Miller Value Partners, first bought bitcoin in 2014. Then, in the spring of 2021, when the coin was hanging around $30,000, soon after it had collapsed from it’s all-time high of about $66,000, he started buying bitcoin again.
“My reasoning was there are a lot more people using it now. There’s a lot more money going into it in the venture capital world. There are a lot of people who are skeptics, who are, now, at least, trying it out,” he added.
Despite his own highly concentrated position, Miller recommends average investors to put 1% of their net worth in bitcoin for diversification, arguing that “if you put 1% of your portfolio in it for diversification, even if it goes to zero, which I think is highly unlikely but of course possible, you can always afford to lose 1%.”
Miller’s key justification for this suggestion is that bitcoin is a one-of-a-kind investment.Bitcoin is the only economic entity where the supply is unaffected by the demand.
Miller, who rose to prominence as a fund manager at Legg Mason for topping the S&P 500 index for a record-breaking 15 years in a row from 1991 to 2005, has previously invested substantially in bitcoin in funds he managed. Miller, who is celebrating his 40th year in the investment industry, is currently the chief investment officer of Miller Value Partners, which he formed in 1999.
Miller has been showing a growing interest in cryptocurrency in the past year. In January he called investing in cryptocurrency a suitable risk management strategy in the current market climate followed by a significant position in Grayscale’s Bitcoin Trust (GBTC).
