When asked what his 'one investment' for a long-term diversified portfolio, legendary value-investor Bill Miller likely shocked a few dyed-in-the-wool marketwatchers when he said just one word: Bitcoin.
Miller argues that bitcoin provides an insurance to financial catastrophe that no other asset can provide and is the only investment that can increase in value by ten or 50 times.
“I think the average investor should ask himself or herself: what do you have in your portfolio that has that kind of track record:
is very, very under-penetrated;
can provide a service of insurance against financial catastrophe that no one else can provide and;
can go up 10 times or 50 times?
The answer is: nothing.”
Additionally, Miller notes that "certainly, if you own any gold, you should own some [bitcoin]":
“In the United States, Franklin Roosevelt confiscated everybody’s gold in 1933,” Miller said when asked why he invests in bitcoin since he lives in the U.S., which is supposedly stable, and not in a country like Argentina.
“You had to turn it in or you went to jail.”
Miller said he thinks bitcoin is best thought of as “digital gold” with a strictly limited supply and went on to highlight that as opposed to gold, “they can’t confiscate your bitcoin,” providing a unique store of value that stays in control of its owner regardless of who’s in office and what their agenda is.
Early in the discussion, Miller explained that he bought bitcoin for the first time (at around $200) after a talk by Wences Casares, an Argentinian Bitcoiner, who in 2014 presented the case for BTC as a hedge against governments' loose monetary policies and authoritarian stances by sharing his family's story, whose wealth got debased or confiscated by the government in four different occasions over 150 years.
Regarding the argument that the asset carries no intrinsic value, Miller brought up the analogy of the Mickey Mantle baseball card and paintings that command a hefty price based on demand.
“Bitcoin is the only economic entity where the supply is unaffected by the demand.”
While Miller notes that half of his personal investment portfolio is allocated to bitcoin and Bitcoin-related companies, including bitcoin miner Stronghold and software intelligence company MicroStrategy, he thinks regular investors should have a less concentrated position:
“if you put 1% of your portfolio in it for diversification, even if it goes to zero, which I think is highly improbable, but of course possible, you can always afford to lose 1%.”
Watch the full interview below (forward to 2:00 for start of the crypto discussion):
Tue, 01/11/2022 - 18:25