Bitcoin is insurance against financial disaster. Billionaire opinion from Miller Value Partners
Bill Miller is the billionaire founder and chief investment officer of Miller Value Partners. The day before, he said he believes Bitcoin is “an insurance policy against financial disaster”. These words were voiced by Miller on a recent edition of the podcast “Richer, Wiser, Happier”. In his view, crypto could be a very important tool for those who, for whatever reason, have not had access or have been denied access to important services in the banking sector. We tell you more about the situation.
It is not the first time a billionaire has commented on cryptocurrencies, and it happens quite often. For example, the last time this happened was last week. At that time, Miller said that he had invested half of his investment portfolio into BTC, but he wasn’t worried at all about the current drawdown.
According to him, he’s seen more than that in the coin niche before. Therefore, it does not make sense to panic about the current situation, because previously the coin market collapsed even more, but both reached the former highs and set new records.
Growth of cryptocurrencies
What are the advantages of cryptocurrencies
To illustrate his point, the billionaire recalled the withdrawal of US troops from Afghanistan in August 2021. This event led to a quick takeover of the country by the Taliban and huge problems in the economy. Here is his rejoinder in which the expert mentions the event.
When the US withdrew troops from Afghanistan, Western Union stopped sending or receiving remittances from there. If you had used your bitcoins in such a situation, for example, everything would have been fine. Your coins simply exist. You can send them to anyone in the world if you have a phone.
In other words, digital decentralised assets are really able to save people from various problems. This is especially true of the current economic malaise facing people in many countries today.
Billionaire Bill Miller
According to Miller, examples of how cryptocurrency can function as “insurance” do not necessarily have to involve such force majeure circumstances. Another telling example is the state of the crypto market during the COVID-19 pandemic and the sharp response from the US Federal Reserve (Fed) in dealing with the economic impact of the virus. The expert continues.
When the Fed stepped in and started “squeezing” the money supply and bailing out, essentially, mortgage rates, Bitcoin functioned fine. No one attacked the cryptocurrency, the system functioned without the Fed and without any additional intervention. Everyone got their bitcoins, the price adjusted, and then when crypto-enthusiasts realised rising inflation, the value of the cryptocurrency skyrocketed. It’s an insurance policy against financial disaster.
In other words, Bitcoin's fundamental advantages in the form of a limited maximum supply of cryptocurrency and a fixed rate of inflation attract a huge number of people who are unhappy with the global economy. Note that this is also true for other popular cryptocurrencies. For example, in Avalanche and Ethereum networks, native tokens are burned during transactions, which somehow reduces the volume of coins in circulation.
According to Cointelegraph’s sources, Miller also touched on the topic of Bitcoin’s “worthlessness”, which was raised not too long ago by another well-known investor Warren Buffett. He previously stated that he “wouldn’t even buy all the bitcoins in the world” if they were offered to him for just $25. Here’s what Miller thinks about it.
Buffett said Bitcoin is an asset that produces nothing and therefore has no value. Fair enough. If the only things you think you can value are productive assets, then no one is forcing you to buy Bitcoin, right? So ignore Buffett’s words.
Billionaire Warren Buffett
Miller is known for managing an investment portfolio that consistently outperformed the S&P 500 stock index for 15 consecutive years from 1991 to 2005. He is also known for his support of Bitcoin, as the investor invested half of his liquid funds in the cryptocurrency for investment in January.
When asked by the podcast host whether he still holds that position, the billionaire confirmed that about 40-50 per cent of his money is in Amazon shares, and his stake in Bitcoin is “about the same”. In addition, more than 80 per cent of Miller’s capital is spread between the two assets.
We believe that Bitcoin and other cryptocurrencies do have the power to save people in the event of global economic problems - at the very least they will continue to work and perform even in the event of default and bank lock-ups. However, at the same time, they are volatile, which means that they can lose a lot of their value. That means users need to take this into account and not forget about stablcoins for a rainy day.
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