Legendary investor Bill Miller anticipates that financial advisors will soon recommend allocating 1% to 3% of investment portfolios to Bitcoin within the next three to five years. Miller, who initially purchased Bitcoin at around $200 after attending a lecture by entrepreneur Wences Casares, shared his insights in a recent Forbes interview.
Miller emphasized Bitcoin’s unique economic properties, particularly its fixed supply, which remains unaffected by changes in demand or price—unlike traditional currencies or commodities like gold. When the price of assets like gold rises, increased production can stabilize or reduce prices, but Bitcoin’s capped supply ensures that higher demand won’t lead to more Bitcoin being produced.
“It’s the only economic entity where the supply is unaffected by the demand or the price,” Miller said. “At the most basic level, all you have to believe is that the demand for Bitcoin will grow faster than the supply.”
Bitcoin’s Fixed Supply Could Propel Prices Higher, Unlike Gold: Bill Miller
Miller noted that Bitcoin’s price can continue rising as more people buy into it, given its fixed supply. This contrasts with gold, where rising prices can incentivize more mining, potentially driving prices down.
Earlier this year, JPMorgan reported that Bitcoin outperformed gold in investor portfolio allocations when adjusted for volatility. The bank found that Bitcoin’s allocation in portfolios was 3.7 times higher than that of gold.
Miller’s interest in Bitcoin was sparked by Wences Casares, an Argentine entrepreneur who spoke at the Allen & Co. Sun Valley Conference in 2012. Casares shared how inflation and government actions had repeatedly eroded personal wealth in Argentina, presenting Bitcoin as a form of “digital gold” that could act as a hedge against financial instability and inflation.
Miller recalled, “[Casares] said, I would suggest you consider putting 1% of your liquid assets into Bitcoin and then forget about it. You could lose all your money, but look how much it’s gone up in the last two years.”
Bitcoin’s Independence from Central Bank Interventions Could Sway Financial Advisors
Reflecting on Bitcoin’s resilience during times of economic turmoil, Miller highlighted that while central banks had to intervene to stabilize traditional financial markets during crises, Bitcoin required no such intervention.
“The Fed had to flood the system to keep the Treasury market functioning, but nobody had to come in and bail out Bitcoin. You can’t bail it out,” he remarked.
Miller’s analysis points to a future where financial advisors will recommend Bitcoin to their clients as part of a diversified portfolio. As more financial professionals recognize Bitcoin’s independence from central bank influence and its potential as a hedge against inflation, the cryptocurrency may become a mainstay in portfolios.
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