Legendary fund manager who beat the S&P 500 for 15 consecutive years says traditional institutions will all own Bitcoin

Legendary investor Bill Miller said in an interview with CNBC that the risk of Bitcoin going to zero is lower than ever before and predicted that more and more institutions will invest in this emerging asset.

Bull Market Continues

Bill Miller, the legendary fund manager known on Wall Street for his "value investing" approach, managed the Legg Mason Value Trust from 1991 to 2005, beating the S&P 500 for 15 consecutive years, creating an investment legend. After leaving Legg Mason, Bill Miller founded his own investment firm, Miller Value Partners.

In an interview with CNBC this week, the legendary investor commented on the post-election financial markets, stating:

"I think the market is telling you the bull market continues, and I think the advantage is 'value.' The Fed needs time, but they can get inflation up to 2%, so growth won't be a problem."

Additionally, Bill Miller added that 60% of the stocks in the S&P 500 are declining, and there are many targets worth buying among them.

Traditional Institutions Will Hold Bitcoin

Apart from the traditional financial markets, Bill Miller also shared his views on Bitcoin's recent performance. Bill Miller stated that over the past five to ten years, Bitcoin has been the best-performing asset class. As a practitioner of value investing theory, Bill Miller added that the value of Bitcoin comes from a simple supply and demand rule:

"The story of Bitcoin is straightforward, it's supply and demand. Bitcoin has a fixed total supply, and the supply increases at about 2.5% annually, while the growth in demand exceeds this level."

Although many consider Bitcoin as an alternative to gold, its price volatility suggests it is not yet a stable store of value. It reached a high of $19,000 at the end of 2017, only to drop to below $4,000 a year later, and has since risen over 300% from its 2018 low. Bill Miller noted that the price of Bitcoin is highly volatile, but after years of market consensus, Bitcoin's resilience increases every day, with the risk of going to zero lower than ever. Bill Miller stated:

"I think every major bank, investment bank, high net worth firm will ultimately own Bitcoin, gold, or similar commodities as a reserve."

Early Institutional Investors in Bitcoin

If you are an early investor in cryptocurrencies, you would know that Bill Miller's endorsement of Bitcoin is not new. Back in 2017, Miller Value Partners, the company founded by Bill Miller, allocated 30% of its managed MVP 1 fund to Bitcoin. According to a report by The Wall Street Journal at the time, the company disclosed in a letter to MVP 1 clients that the fund's average price for holding Bitcoin was $350. Bill Miller stated at the time:

"My view on Bitcoin is that it is a technological experiment, which may or may not prove to have any lasting value. Bitcoin's market cap exceeds 90% of the companies in the S&P 500 index, but it could still fail. I'm not sure, and neither is anyone else."