Bill Miller is a well-known figure on Wall Street. He is the former chairman of Legg Mason Value trust and is a current member of Miller value partners LLC. However, the most important story of the day is that he is investing 30% of his portfolio in the Miller Value Partner's MVP1 fund is in Bitcoin.
This was first disclosed in an interview with the Wall Street Journal where the 30% investment in the $154m fund was reported. This is also a massive increase in the fund's digital currency holdings. It went from a mere 5% of the fund at the beginning of the year to today's sizable 30%. The MVP fund saw an increase of nearly 73% YTD which may be down to these investments.
A Bitcoin Adherent
Mr Miller sent a letter to his investor’s last week in which he estimated the average price which he paid for the Bitcoins was about $350 per coin. This is perhaps as a result of him investing in the Bitcoin markets starting in 2014. He said that if he were not so exposed to Bitcoin through the fund, he would have invested about 1% of his liquid net worth.
In the same letter, he chose to take a cautious tone as to the long term prospects of Bitcoin. He stated that Bitcoin is a “technological experiment that may or may not prove to have long lasting value”. He made the point that currently, Bitcoin has a market capitalisation that is larger than 90% of the companies in the S&P 500.
There is still chance, he thinks, that it could go to zero. However, as he sees more VC and institutional money flow into the ecosystem, he believes that the chance of it going to zero decreases considerably.
Words on the Naysayers
Miller also took a shot at a number of those well-known investors and industry titans who have had unfavourable views of the technology recently. For example, you had the numerous rants from Jamie Dimon comparing Bitcoin to a fraud and Warren Buffet's claims that it is a bubble. Miller claimed that:
if bitcoin becomes only 10 percent as popular gold, then it’s an 800 billion market value.
Whether more financiers on Wall Street decide to invest in cryptocurrencies is uncertain. Yet, more confidence in the asset class from investors by the likes of Bill Miller will no doubt push mass adoption further.
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