Bitcoin is less risky as the price rises, says Bill Miller
Bitcoin bull Bill Miller says the BTC becomes safer as its price increases.
Bitcoin will behave in a specific way because it is at the beginning of its adoption cycle.
Banks can buy, sell and hold BTC, but the big banks haven’t started yet.
The Trust Project is an international consortium of media Financial Peak organisations based on transparency standards.
Famous investor Bill Miller told CNBC that, unlike most stocks, Bitcoin’s higher price reduces risk.
In an interview for The Exchange on CNBC.com, the CEO and Chief Investment Officer of Miller Value Partners, explained the nature of Bitcoin’s risk profile.
How is this possible?
Miller, who is famous for his track record with S&P, highlighted a few factors to support his statement. In particular, he stated that Bitcoin was still at the beginning of its adoption cycle. In other words, there are even more people and institutions to start investing in the asset.
He noted that although banks are allowed by regulators to buy and hold BTCs, none of them are doing so. He said they refrain from doing so because they would be „worried“.
In addition, there is the issue of supply and demand. Institutional investors come into the market and make large-scale purchases. „As long as that happens,“ he said, Bitcoin is likely to increase.
Is cash a rat?
CNBC highlighted Miller’s latest newsletter to investors for unusual humour. Miller called Warren Buffet’s famous labelling of Bitcoin as „rat poison“. „Maybe he’s right,“ Miller replied. „Bitcoin could be rat poison, and the rat could be cash.“
Continuing the cycle of Bitcoin
Miller also reflected on the issue of „waiting for withdrawal“. In other words, with the course of the BTC moving into unfamiliar territory, would it make sense to wait for the cycle to end?
The problem with this thinking, he says, is that it has already reached its bottom. „You could have bought $4,000 worth of bitcoin in the first quarter .
Also, people who are looking for the bottom tend to miss opportunities. They expect the price to continue to fall, even after it starts to rise. Then, when it actually rises, they wonder if they should buy. In essence, they drive the market out.
What’s next for the BTC?
Miller did not give a prediction for the price of Bitcoin in the interview. What he did repeatedly was to focus on the fact that Bitcoin is at the beginning of its adoption cycle.
Since Bitcoin is at this early stage, certain things can be expected. Miller highlighted the fact that BTC is moving by leaps and bounds. These jumps are followed by dives of up to 80%, he noted. Bitcoin has done this twice, he added. That said, he has also recovered; it’s natural for an asset at this point in its investment life.