Investor Bill Miller, for a long time, told CNBC on Tuesday that he believes Bitcoin is firmly in the mainstream, claiming that the cryptocurrency rally in recent months is significantly different from the rise in 2017 and the subsequent sinking.
In an interview with the Stock Exchange, the founder and investment director of Miller Value Partners said that he believes that bitcoin still has room to run. The world’s largest cryptocurrency by market value traded around $ 55,800 on Tuesday afternoon. About 90% have already been collected so far, according to Coindesk.
“Pound [of bitcoin] increases by 2% per year and demand grows faster. That’s all you really need to know, and that means it works better, “said Miller, who began buying bitcoin around 2014 or 2015 at an average cost of $ 350 a coin.
However, he acknowledged that historically volatile bitcoin is likely to continue to have strong price fluctuations, such as the one that happened over the weekend, hitting the digital currency below $ 60,000. Last week, it reached an all-time high of nearly $ 65,000.
Miller said the 2017 rally was, in fact, a bubble that eventually erupted. It’s different now, he argued, saying, “I don’t think it’s a bitcoin bubble at all. I think this is now the beginning of its integration. “
Bitcoin saw its price rise in 2017, reaching what was then a record of nearly $ 20,000 in December. It fell sharply in the following months, losing about 80% of its value in what became known as the “crypto winter”.
“Even then, during the bubble, it fell 20% on five different occasions, so with bitcoin, volatility is the price you pay for performance,” added Miller, who managed a fund that defeated the S&P 500. for 15 consecutive years while at Legg Zidar.
Bitcoin traded below $ 11,000 in October, but its rally won steam in the fall and was taken over in 2021.
Institutional adoption has been cited as a factor in the growth of bitcoin, with companies such as Tesla buying digital currency using cash on balance sheets. A couple of major Wall Street banks – Morgan Stanley and Goldman Sachs – are also taking steps to offer wealth management customers exposure to bitcoin.
Miller said he shares the belief held by other good cryptocurrencies that bitcoin is “digital gold.”
Rarity is a key feature of bitcoin, with its total offering capped at 21 million chips. There are currently 18.69 million bitcoins in circulation, according to Coindesk. The new bitcoins are coming to market as a reward for so-called miners, who use high-power computers to verify transactions in the decentralized network.
“Gold is about a $ 10 trillion asset class, and bitcoin is $ 1 trillion and is infinitely divisible, or so,” Miller said. “It’s easy to carry and can be shipped anywhere in the world if you have a smartphone, so it’s a much better version, as a store of value, than gold.”