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Financial Guru Bill Miller IV
In his last blog job titled “Why I Still Bet on Bitcoin,” financial expert and seasoned investor Bill Miller IV, CFA, CMT, President and CIO of Miller Value Partners, reiterated his bullish stance on Bitcoin. According to Miller, Chairman, CIO of Miller Value Partners and son of legendary investor Bill Miller III, Bitcoin remains in the early stages of a secular transition in the outlook for global capital and governance.
Bitcoin: it’s still early
Miller’s analysis begins by reflecting on a thesis he first introduced in 2015 in his article “A Value Investor’s Case for…Bitcoin?” ! “. He argued that Bitcoin had potential far beyond its valuation at the time, either as a revolutionary payment network or as a viable alternative to traditional fiat capital.
Today, Miller observes Bitcoin’s ascendancy but maintains its journey is far from over. Its current valuation places Bitcoin’s market capitalization at around $1.5 trillion, a figure he considers tiny compared to the nearly four-trillion-dollar global fiat capital system.
“Although Bitcoin has recently reached new highs against all fiat currencies, I believe that today Bitcoin is still significantly undervalued and the world is likely in the early stages of a secular shift in the way of which humans perceive capital and its governance,” writes Miller. It highlights the inadequacies of current monetary systems, which are prone to human error and manipulation, often leading to currency devaluation through inflation and mismanagement.
To support his argument, Miller references Lyn Alden’s “Broken Money,” which describes the historical precedence of superior monetary technologies, ultimately eclipsing their obsolete counterparts. Alden’s analysis suggests that when people are presented with better options for preserving or increasing their financial resources, they will invariably gravitate toward those options.
“History shows that the better money technology inevitably wins, as people trade inferior depreciated capital technologies for superior technologies that better fit users’ goal of preserving or increasing their option set over time. time,” Miller writes. Bitcoin, with its decentralized, transparent and immutable ledger, offers a solid alternative to fiat systems charged with governance.
Miller also delves deeper into the technical and philosophical underpinnings of Bitcoin, describing it as a “true technological breakthrough.” Unlike traditional monetary systems, Bitcoin operates globally without requiring centralized control, enabling transactions resistant to censorship and confiscation. According to Miller, this ownership alone radically changes the dynamics of how property rights are transferred and managed across borders and generations.
He also comments on the general public’s struggle to understand and value revolutionary technologies, citing the substantial returns generated by companies like Nvidia, Google and Meta as examples of what happens when new paradigms are adopted. “Humans are notoriously bad at contextualizing the relevance and potential of new technologies,” says Miller, emphasizing that the case of Bitcoin is no different.
“This gap is particularly important for revolutionary concepts of an epistemic nature, that is, inventions that change the way we think about and interact with information and each other. This also explains why NVIDIA, Google, and Meta have generated outsized returns relative to other stocks,” says Miller.
In a compelling conclusion to his argument, Miller acknowledges the inherent risks and volatility associated with Bitcoin. As a technology and asset class still in its development phase, it faces potential changes in the perception and regulatory landscapes. However, he warns that underestimating Bitcoin long-term potential could be as harmful as ignoring the early signs of major technological change.
“It’s still early,” Miller concludes, suggesting that the journey for Bitcoin is only just beginning. He remains confident that as the world continues to grapple with the limitations of fiat currencies and the possibilities offered by digital assets, the true value of Bitcoin will eventually be realized, reflecting its ability to redefine the fabric of global economic systems. This position not only strengthens its investment strategy, but also represents a bold prediction for the future of finance.
At press time, BTC was trading at $67,406.
Featured image of CNBC chart from TradingView.com