The billionaire called the behaviour of Bitcoin after the FTX bankruptcy a “miracle”. What did he mean by that?
This year has seen many negative events for the crypto market. Bitcoin price along with other digital assets has fallen severely and managed to hit its global lows several times, in addition to many large companies going bankrupt. Nevertheless, the situation for BTC could be much worse – that is the opinion of famous billionaire Bill Miller. He previously announced his retirement after his position as the head of Miller Value Partners, but Miller is still looking to increase his capital by betting on Bitcoin. We tell you more about the situation.
Note that the scale of the cryptocurrency market collapse in 2022 was indeed serious. This is also noticeable due to the fortunes of prominent representatives of the blockchain industry, entrepreneurs and so on. As noted by Forbes, the amount at the disposal of the top players in the market has dropped by 116 billion. Changpen Zhao, founder and head of cryptocurrency exchange Binance, lost the most among them.
Binance chief executive Changpen Zhao
More details of the new ranking can be found at the link.
What will happen to cryptocurrencies?
Miller shared his thoughts on Bitcoin’s prospects with Barron’s reporters. He confirmed that he is still optimistic about the cryptocurrency’s future. With that in mind, it occupies one of the dominant positions in the billionaire’s investment portfolio.
Situation in the cryptocurrency market today
According to Miller, Bitcoin could well become “digital gold” – a popular new tool for capital accumulation. But he doesn’t share such optimism about altcoins. Bill noted that altcoins could well be grouped into one separate category. Here’s his rejoinder.
Most of the altcoins, like most venture capital investments, are doomed to fail. But I’ve never heard a strong argument that you shouldn’t invest at least 1 per cent of your capital in Bitcoin. Everyone can afford to lose 1 per cent.
It should be noted that the positioning of Bitcoin as digital gold is quite popular. It suggests that BTC should better preserve investors' capital and in addition perform more acceptably in times of economic hardship in the markets.
In 2022, BTC has clearly failed to do that. According to IntoTheBlock analysts, Bitcoin's value has sagged 64 per cent since January, while Etherium's has fallen 68 per cent. Alternatively, the chart shows data on the S&P500 and Nasdaq 100 indices, which fell 19 per cent and 32 per cent respectively. Which means crypto isn't always the best investment - and Bitcoin proves that too.
Comparing the price movements of Bitcoin, Etherium as well as the Nasdaq 100 and S&P500 indices
Miller also commented on the bankruptcy of cryptocurrency exchange FTX. According to CryptoPotato sources, the billionaire had expected a larger scale of negative consequences for the industry. Bill admitted that the fact that the price of BTC managed to stabilize at $17,000 after falling is a true miracle. He expected the value of the major cryptocurrency to fall by at least half after the FTX collapse.
Bill Miller wore a Bitcoin emblem cap during his interview
😈 YOU CAN FIND MORE INTERESTING THINGS FROM US AT YANDEX.ZEN!
Bill Miller’s views, meanwhile, are not shared by many institutional investors, i.e. professionals with large amounts of capital. In particular, Jared Gross, head of institutional portfolio strategy at JPMorgan Asset Management, believes that the big players have little interest in crypto. Here’s his quote, cited by Cointelegraph.
As an asset class, cryptocurrencies are virtually non-existent to most large institutional investors. It’s all about too much volatility and a lack of internal returns tangible in the investment process, which makes crypto a difficult tool for institutional investors.
We should note that this position sounds strange. Still, over the past few years, quite a few public and non-public companies have gotten involved with Bitcoin, buying the cryptocurrency for their own balance sheet. The leader here is traditionally MicroStrategy, which has 130 thousand BTC.
Public companies that own bitcoins
According to Gross, most institutional members are “breathing a sigh of relief” at the end of the year: they simply didn’t have time to invest heavily in cryptocurrencies, which prevents them from experiencing a major crash in the digital asset market. Nevertheless, on a fundamental level, various organisations are taking steps towards the cryptosphere.
In October, America’s oldest bank, BNY Mellon, announced that it would secure ETH and BTC for select institutional customers. In addition, a French bank called Société Générale had earlier received regulatory approval as a provider of digital asset services.
Meanwhile, Bitcoin’s volatility has reached an all-time low, meaning that the cryptocurrency has remained stable for quite some time. The last time it was nearly as low was at the end of 2018. As a reminder, volatility then spiked after a final bearish trend fall, during which Bitcoin’s price plunged to $3,200.
Bitcoin’s volatility
Over the past six weeks, the major cryptocurrency has been trading between the $15.7 and $18,000 levels. That said, many countries around the world are now celebrating Christmas and other New Year’s holidays, so traders are unlikely to be visibly active in the coming weeks.
The data proves it. The day before, the total trading volume on cryptocurrency exchanges fell below $10 billion overnight, which has not been seen since December 2020. The actual result for the last 24 hours is 8.53 billion.
Trading volumes on cryptocurrency exchanges overnight
We think Bitcoin's fall looks okay overall - especially given the extent of its collapse during previous bearish trends. Now, industry participants can only hope that the worst for the market is over, and that the coming months will not end in another wave of bankruptcies for the digital asset niche.
Related posts
