Bill Miller IV, chairman and CIO of Miller Value Partners, has explained why bitcoin is undervalued despite the cryptocurrency’s recent highs. He emphasized bitcoin’s potential as a revolutionary monetary system superior to fiat currencies, which are subject to human control and debasement. Miller believes bitcoin’s market cap has room for substantial growth. ‘I Believe Bitcoin […]
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Bitcoin Is ‘Still Significantly Undervalued,’ Says Finance Guru Bill Miller IV
In his latest blog post titled “Why I’m Still Betting on Bitcoin,” financial expert and seasoned investor Bill Miller IV, CFA, CMT, Chairman and CIO of Miller Value Partners, reiterated his bullish stance on Bitcoin. According to Miller, who is the 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 global capital and governance perspectives.
Bitcoin: It’s Still Early
Miller’s analysis begins with a reflection on a thesis he first introduced in 2015 in his paper, “A Value Investor’s Case for…Bitcoin?!”. He argued that Bitcoin held potential far beyond its valuation at the time, either as a revolutionary payment network or as a viable alternative to traditional fiat capital.
Fast forward to today, Miller observes Bitcoin’s ascendancy but maintains that its journey is far from over. His current valuation places Bitcoin’s market capitalization at about .5 trillion, a figure he considers minuscule compared to the nearly quadrillion-dollar global fiat capital system.
“Despite Bitcoin recently hitting new highs against every fiat currency, I believe Bitcoin today is still significantly undervalued and that the world is likely in the early stages of a secular shift around how humans think about capital and its governance,” Miller writes. He points out the inadequacies of current monetary systems, which are prone to human error and manipulation, often leading to the devaluation of currency through inflation and mismanagement.
Supporting his argument, Miller references “Broken Money” by Lyn Alden, which outlines the historical precedence for superior monetary technologies eventually eclipsing their outdated counterparts. Alden’s analysis suggests that when people are presented with better options for preserving or growing their financial resources, they will invariably gravitate towards those options.
“History shows that the best monetary technology inevitably wins, as people trade inferior depreciating capital technologies for superior ones that better align with users’ goal of preserving or growing their option set over time,” writes Miller. Bitcoin, with its decentralized, transparent, and immutable ledger, offers a robust alternative to the governance-laden fiat systems.
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 on a global scale without the need for centralized control, enabling transactions that are resistant to censorship and confiscation. This property alone, according to Miller, 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 embraced. “Humans are notoriously bad at contextualizing the relevance and potential of new technologies,” Miller states, emphasizing that Bitcoin’s case is no different.
“This gap is especially wide for groundbreaking concepts of an epistemic nature – that is, inventions that change the way we think about and relate to information and each other. It also explains why NVIDIA, Google and Meta have generated outsized returns relative to other stocks,” Miller states.
In a compelling conclusion to his argument, Miller acknowledges the inherent risks and volatility associated with Bitcoin. As a technology and asset class that is still in its developmental phase, it faces potential shifts in perception and regulatory landscapes. However, he warns that underestimating Bitcoin’s long-term potential could be as harmful as ignoring the early signs of any major technological shift.
“It’s still early,” concludes Miller, suggesting that the journey for Bitcoin is just beginning. He remains confident that as the world continues to grapple with the limitations of fiat currencies and the possibilities presented by digital assets, Bitcoin’s true value will eventually be realized, reflecting its capacity to redefine the fabric of economic systems worldwide. This stance not only reinforces his investment strategy but also serves as a bold forecast for the future of finance.
At press time, BTC traded at ,406.
Bitcoin Is ‘Still Significantly Undervalued,’ Says Finance Guru Bill Miller IV
In his latest blog post titled “Why I’m Still Betting on Bitcoin,” financial expert and seasoned investor Bill Miller IV, CFA, CMT, Chairman and CIO of Miller Value Partners, reiterated his bullish stance on Bitcoin. According to Miller, who is the 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 global capital and governance perspectives.
Bitcoin: It’s Still Early
Miller’s analysis begins with a reflection on a thesis he first introduced in 2015 in his paper, “A Value Investor’s Case for…Bitcoin?!”. He argued that Bitcoin held potential far beyond its valuation at the time, either as a revolutionary payment network or as a viable alternative to traditional fiat capital.
Fast forward to today, Miller observes Bitcoin’s ascendancy but maintains that its journey is far from over. His current valuation places Bitcoin’s market capitalization at about .5 trillion, a figure he considers minuscule compared to the nearly quadrillion-dollar global fiat capital system.
“Despite Bitcoin recently hitting new highs against every fiat currency, I believe Bitcoin today is still significantly undervalued and that the world is likely in the early stages of a secular shift around how humans think about capital and its governance,” Miller writes. He points out the inadequacies of current monetary systems, which are prone to human error and manipulation, often leading to the devaluation of currency through inflation and mismanagement.
Supporting his argument, Miller references “Broken Money” by Lyn Alden, which outlines the historical precedence for superior monetary technologies eventually eclipsing their outdated counterparts. Alden’s analysis suggests that when people are presented with better options for preserving or growing their financial resources, they will invariably gravitate towards those options.
“History shows that the best monetary technology inevitably wins, as people trade inferior depreciating capital technologies for superior ones that better align with users’ goal of preserving or growing their option set over time,” writes Miller. Bitcoin, with its decentralized, transparent, and immutable ledger, offers a robust alternative to the governance-laden fiat systems.
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 on a global scale without the need for centralized control, enabling transactions that are resistant to censorship and confiscation. This property alone, according to Miller, 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 embraced. “Humans are notoriously bad at contextualizing the relevance and potential of new technologies,” Miller states, emphasizing that Bitcoin’s case is no different.
“This gap is especially wide for groundbreaking concepts of an epistemic nature – that is, inventions that change the way we think about and relate to information and each other. It also explains why NVIDIA, Google and Meta have generated outsized returns relative to other stocks,” Miller states.
In a compelling conclusion to his argument, Miller acknowledges the inherent risks and volatility associated with Bitcoin. As a technology and asset class that is still in its developmental phase, it faces potential shifts in perception and regulatory landscapes. However, he warns that underestimating Bitcoin’s long-term potential could be as harmful as ignoring the early signs of any major technological shift.
“It’s still early,” concludes Miller, suggesting that the journey for Bitcoin is just beginning. He remains confident that as the world continues to grapple with the limitations of fiat currencies and the possibilities presented by digital assets, Bitcoin’s true value will eventually be realized, reflecting its capacity to redefine the fabric of economic systems worldwide. This stance not only reinforces his investment strategy but also serves as a bold forecast for the future of finance.
At press time, BTC traded at ,406.
‘The Future of Digital Payments Lies in Web3 Payment Services’ Says Robert Miller of Fuse
Despite not being mainstream payment solutions yet, cryptocurrency-based payments (also known as Web3 payments) already bring benefits such as lower transaction fees, Robert Miller, the vice president of growth at Fuse, a layer 1, EVM-compatible blockchain for launching dapps, has asserted. For merchants, Web3 payments come with the added benefit of what Miller called protection from “fraudulent chargebacks.”
Crypto Payments Trump Traditional Payment Methods
To back his assertions, Miller claimed many of the merchants that are presently experimenting with or encouraging their customers to use Web3 payments are doing so because they are seeking a better deal than what they are getting from traditional payment providers.
Miller, however, conceded that Web3 payments are still at their infancy stages and as such they come with certain limitations which hinder their adoption. In his written responses to questions from Bitcoin.com News, Miller also highlighted the security challenges that users of Web3 payment methods must expect. In addition, the Fuse senior executive also reiterated the argument that self custody of private keys is the most ideal and safe method of storing one’s digital assets.
Bitcoin.com News (BCN): What are Web3 payments and why should online merchants care about Web3 payments at all?
Robert Miller (RM): Web3 payments refer to payments made using cryptocurrencies and blockchain technology. Online merchants should care about Web3 payments because they offer several benefits over traditional payment methods.
Firstly, cryptocurrency payments are faster and more secure due to the immutable nature of blockchain technology. Secondly, they have lower transaction fees, which can significantly increase a merchant’s profit margins. Thirdly, they allow for global reach and expand the customer base beyond geographic locations. Fourthly, accepting cryptocurrency payments can increase customer loyalty, as cryptocurrency enthusiasts prefer to support merchants who accept their preferred form of payment. Finally, in a world where money is being reinvented, accepting Web3 payments can enhance a merchant’s brand image as an innovative business that values cutting-edge technology and customer privacy.
Using a Web3 payments solution, we’re cutting off the middleman to our transactions – the banks, the payment processors, and the brokers. Web3 payments are entirely peer-to-peer and are built on trustless logical systems, meaning no one has to rely on a third party to facilitate the transaction. More vitally, businesses and online merchants allow instantaneous, borderless transactions with low fees depending on the amount sent or received.
BCN: Can you explain why an online buyer should opt for crypto payments over say Visa, Stripe or other traditional payment methods that are supported by merchants?
RM: Buyers should do whatever is most beneficial to them as a consumer at the time. If the offer is the same as yours and you prefer to use Visa, then you should use Visa. The merchant, in this case, will pay 3.5% on the transaction. Consider a business doing M/year in revenue – this is a potential ,000 in Visa transactions fees alone, which is an insane amount of money.
This is why merchants are increasingly opting to experiment with Web3 payments, often offering discounts or loyalty programs through NFTs or tokens to encourage consumers to use the payment option that helps them save money and enhance the user experience.
BCN: The Bitcoin network has of late seen the number of unconfirmed transactions climb to over 200,000, something that has pushed the average network fee to nearly . Some have said such high fees render moot the argument supporting the use of crypto as a means of payment. Do you agree with this assertion?
RM: The high fees and long confirmation times of Bitcoin transactions have been a source of criticism for the cryptocurrency. However, it’s important to note that Bitcoin was not designed primarily as a payment system, but rather as a decentralized store of value.
While it’s true that the high fees and slow transaction times may make Bitcoin less attractive for small and everyday transactions, there are still many use cases where it can be valuable. Additionally, there are other cryptocurrencies and blockchain networks that are specifically designed for fast and low-cost transactions, such as Fuse, Polygon and Binance Smart Chain. These networks are more suitable for payment use cases.
BCN: Your blockchain project Fuse is said to be aiming to enable seamless and affordable crypto payments in daily life. From your standpoint, what do you think are the benefits of accelerating the mainstream adoption of Web3?
RM: When big companies like Starbucks, Nike, Adidas, and Mcdonald’s announce plans to experiment with Web3 payments, they typically throw down a multi-million dollar POC (proof of concept) budget and assign a dedicated team to run the project without it necessarily impacting other parts of the business in a big way. SMBs and startups cannot do this. So how do they ensure they participate in the paradigm shift of money?
Fuse provides simple-to-deploy, end-to-end integrated products, including a wallet SDK, ready-to-use APIs, and mobile wallet tools and infrastructure to level out the planning field and ensure that businesses that are the backbone of the economy can play a role.
BCN: What advantages do Web3 native solutions such as yours have over those offered by giants like Visa, Paypal, and Stripe?
RM: The future of digital payments lies in Web3 payment services. They offer a range of benefits over legacy payment systems, including reduced transaction fees, faster settlement times, increased security, borderless payments, and greater transparency and privacy. As Web3 payments continue to gain traction and become more widely adopted, they have the potential to transform the way we conduct transactions, making them more efficient, secure, and accessible.
Compared to traditional point-of-sale (POS) systems, accepting crypto payments offers several benefits, including lower transaction fees, merchant protection from fraudulent chargebacks, increased sales potential, and increased customer convenience. Additionally, there is a level of anonymity with crypto payments that some merchants and customers may find appealing.
The Fuse ecosystem includes 100 integration partners and has been built over three years to provide vital services and infrastructure designed to create a robust platform for mainstream crypto and Web3 payments adoption.
BCN: Your startup is said to have recently launched a million Ignite Funding Program. What is the purpose of this fund and who are the intended beneficiaries?
RM: As part of our ongoing mission to bring Web3 payments to mainstream business adoption, we are dedicated to supporting both real-world and defi projects. The Ignite program comprises two main funding areas. The first is an on-chain defi incentives fund of million, designed to improve the general financial health of the fuse ecosystem. The second is to support early-stage real-world builders on Fuse. The strong on-chain economic activity supports innovation aligned with our north star of achieving mainstream crypto adoption with payments. Innovation, in turn, supports strong economic growth and activity, creating a fly-wheel effect.
BCN: Just like any technology that is still in its infancy stages, Web3 payment platforms are susceptible to security threats and high costs. What is your word of advice for those using Web3 payment solutions for the first time?
RM: Web3 payments are still in their early stages and have certain limitations that must be considered before using them. Web3 payments may be prone to security threats and high transaction costs as several networks are yet to deal with these issues successfully. Luckily, Fuse does not have these issues and can process transactions in under 5 seconds for a cost of less than a cent.
Furthermore, acceptance by merchants is still a challenge, and there is a lack of understanding of the importance and impact of blockchain-related concepts. Scams and fraudulent activities occur everywhere, and staying safe and vigilant is essential while dealing with Web3 payment solutions. Never share private keys, double-check wallet addresses and networks before sending any crypto, and look out for scams or fake sales on social media.
Additionally, centralized exchanges may disappear and take your crypto with them, so owning your keys and using non-custodial wallets is vital. Finally, taxation is essential, and everyone dealing with Web3 payments must know how it is taxed in their region.
What are your thoughts on this interview? Let us know what you think in the comments section below.
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Former Legg Mason Chairman Bill Miller Invested $1.1 Billion Bitcoin
Bill Miller, a highly respected US-based fund manager and former chairman, chief investment officer at billion investment firm Legg Mason, has revealed that he has invested about 50 percent of his MVP 1 fund in bitcoin.
Miller Invested .1 Billion in Bitcoin
On the WealthTrack podcast with Consuelo Mack, hedge fund legend Miller, who oversaw Legg Mason’s portfolio of 8 billion in assets as the principal portfolio manager, stated that his personal hedge fund called MVP 1 has allocated 50 percent of its holdings in bitcoin.
Currently, Miller’s MVP 1 manages over .2 billion in assets, mostly for high profile investors and mutual funds. Given that 50 percent of MVP 1’s holdings are invested in bitcoin, Miller’s fund has invested more than .1 billion over the past few months.
On the podcast, Miller emphasized that his hedge fund will not sell its bitcoin holdings in the future. Miller also hinted that MVP 1 will not be diversifying its assets in bitcoin to other cryptocurrencies in the market. He said:
“What we’re studying is ways in which we can mitigate risk to the overall fund and the portfolio. It won’t be 50 percent of the fund for that much longer, which does not mean necessarily that we’re going to be selling it.” Miller added that other cryptocurrencies in the market without actual use cases will soon be worthless. “Most of those cryptocurrencies, if monetary history is any guide, will be worthless.”
Miller noted that his son, a Miller Values Partners portfolio manager, pitched him a potential investment opportunity in an upcoming initial coin offering (ICO) that could gain mid to long-term success with a strong market. Several successful billionaire bitcoin investors including Tim Draper have invested in ICOs throughout 2017, some of which demonstrated significant success.
Miller Bought Bitcoin in 2014 at 0
Miller first reportedly purchased and invested in bitcoin in 2014, when the price of bitcoin was 0. At the time, Miller invested 1 percent of his net worth in bitcoin. Although Miller’s net worth has not been publicly disclosed, several analysts have estimated Miller’s net worth to be closer to the billion range.
Under the assumption that Miller has had hundreds of millions of dollars in personal net worth in 2014, Miller could have invested more than a million dollars when the price of bitcoin was 0. A million investment in bitcoin in 2014 would be worth .4 million today.
In the upcoming years, as Coinbase CEO Brian Armstrong emphasized, an increasing number of hedge funds and large-scale investment firms will continue to allocate their assets and capital into bitcoin. If tens of billions of dollars in institutional money flow into the bitcoin market in the short-term, analysts expect the price of bitcoin to reach ,000 by the end of 2018.
“Over 100 hedge funds have been created in the past year exclusively to trade digital currency. An even greater number of traditional institutional investors are starting to look at trading digital assets (including family offices, sovereign wealth funds, traditional hedge funds, and more). By some estimates there is B of institutional money waiting on the sidelines to invest in digital currency today,’ wrote Armstrong.
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