Bill Miller, a legendary value investor and founder of Miller Value Funds, visited the studios of CNBC today where he commented on Bitcoin noting they have a position in the popular crypto. Miller did not provide a price target (like typically given by securities analysts) but said he expected Bitcoin to rise by 50% to 100% from here over the next 12 to 18 months – a pretty bullish expectation.
Asked about regulatory risk, Miller said he does not believe this will be an issue as Bitcoin is truly decentralized. If you attempt to shut it down in the US, it will just continue to operate elsewhere. By accepting Bitcoin, US regulators stand a better chance of monitoring it as opposed to pushing it off to other jurisdictions.
In Miller’s most recent missive on markets on January 2nd, he shared some of his perspective on Bitcoin – the best performing asset class of 2020. Miller said:
“At this writing, it is trading at over $31,000, up more than 50% since the middle of December. It has outperformed all major asset classes over the past 1, 3, 5, and 10 years. Its market capitalization is greater than JP Morgan and greater than Berkshire Hathaway and yet it is still very early in its adoption cycle. 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.”
Regarding more traditional markets, Miller quoted another investing legend Sir John Templeton who said “Bull markets are born in pessimism, grow on skepticism, mature on optimism, and die in euphoria.”
Miller believes we are not yet in a state of euphoria but of optimism.
Miller said that valuations “look high and are high, but are not as high as they look given the aforementioned economic conditions.”
So 2021 is looking pretty good in Miller’s opinion but inevitably things will change. So I guess that means buy Bitcoin.