Right now•3 min read•Bitcoin
Bill Miller and founder of investment firm Miller Value Partners Bill Miller says he sees Bitcoin (BTC) as “insurance against financial disasters.”
In a May 24 episode of the Richer, Wiser, Happier podcast, Miller spoke positively about the cryptocurrency. He believes that with this, those caught in a conflict would still have access to financial products. As an example, he cited the collapse of the financial infrastructure in Afghanistan after the United States left in August 2021.
“When the US pulled out of Afghanistan, Western Union stopped sending transfers there or accepting transfers from Afghanistan, but if you had bitcoin, you had no problems. Your bitcoins are there. You can send them anywhere in the world if you have a cell phone.”
Miller said examples of where cryptocurrencies can act as insurance don’t have to be “all or nothing.” He referred to the development of Bitcoin in the early days of the pandemic and the US Federal Reserve’s response to it:
“When the Federal Reserve stepped in and increased the money supply, essentially supporting mortgage rates, bitcoin worked well. There was no rush for bitcoin. The system worked without the Federal Reserve and without any interference. Everyone got bitcoins, course adapted, and when bitcoiners realized, ‘wait, there’s going to be inflation soon,’ bitcoin went through the roof.”
“I see it as a kind of insurance,” he explained.
Miller also dismissed Warren Buffett’s recent criticism of Bitcoin. Buffett has said bitcoin “does not produce anything” and that he would not buy all the bitcoins in the world even for $25:
“He said bitcoin is an unproductive asset and so it has no value to him. Of course that’s an argument. If productive assets are the only thing you think are valuable, then nobody’s forcing you to buy them, right? So just ignore him.”
He further commented: “The goal of investing is not to own productive assets, but to make money.”
Miller is famous for his portfolio, which outperformed the S&P 500 index for 15 consecutive years between 1991 and 2005. He is also known as a Bitcoin proponent and invested half of his net worth in the asset in January.
When asked if he still holds that position, Miller confirmed that about 40 to 50 percent of his money is in Amazon stock and his bitcoin holdings are “roughly Amazon’s”. He added that he split 80 percent of a net worth between those two assets.
Miller also spoke about the Terra (LUNA) tattoo of Mike Novogratz, the founder of crypto asset manager Galaxy Digital, after the collapse of the Terra ecosystem:
“Someone sent me a picture of Mike Novogratz months ago getting a LUNA tattoo on his arm with the wolf howling at the moon and it’s big. Maybe you should have tattooed Bitcoin on your arm , that would have been a bit more permanent than that.
Novogratz said the tattoo is a “constant reminder that when it comes to venture investing, you have to keep your feet on the ground” as Galaxy Digital reported a $300 million loss on its LUNA investments.
“I felt sorry for him when I saw him go from about $10 billion to $2 billion,” Miller said. “It’s really tragic.”