Fund manager and founder of Miller Value Partners, Bill Miller says holding bitcoin is better than holding cash because the digital asset is immune to the bad policies of the US Federal Reserve. Writing in the 2020 Q4 Market Letter, Miller explains that some companies are already switching to bitcoin to avoid incurring the “guaranteed losses” of holding cash.
Bitcoin beats Berkshire Hathaway
In his briefing focus on the top crypto, the fund manager begins by noting how bitcoin “has outperformed all major asset classes” after the digital asset “is up over 50% since mid-December.” Miller then reminds his audience that the market cap of the digital asset is now higher than Jamie Dimon’s JP Morgan or Warren Buffet’s Berkshire Hathaway.
At the time of writing, data shows that JP Morgan and Berkshire Hathaway’s market cap was $ 400 billion and $ 540 billion, respectively. On the other hand, bitcoin, which one new all time high for the third day in a row, now has a market cap of $ 716 billion.
The surge in bitcoin’s market cap means that the digital asset, which Warren Buffet previously compared to rat poison, is now more valuable than Berkshire Hathaway. It’s this plain new fact that Miller is using to attack Buffet’s infamous bitcoin comment. In his counter-argument, the fund manager says:
Warren Buffett called bitcoin ‘rat poison’. Maybe he’s right. Bitcoin can be rat poison and the rat can be cash.
Growing demand for BTC
In the meantime, allegations are over BTC, the fund manager points to the growing demand for bitcoin by large companies such as Square Inc, Massmutual and Microstrategy. According to Miller, these companies have “moved cash to bitcoin instead of guaranteed losses on cash on their balance sheets.” In addition to these companies, there are also smaller investors among the BTC acquisition craze. These investors buy the digital assets through fintech companies such as Square Inc and Paypal. According to the Miller:
Only Paypal and Square are estimated to purchase all 900 new bitcoins mined every day on behalf of their customers.
Miller ends his letter by suggesting that as more “companies decide to diversify a small portion of their cash balances into bitcoin instead of cash, the current relative trickle down into bitcoin would become a torrent.”
Do you agree with Miller’s claim that holding bitcoin is better than holding cash? Tell us what you think in the comments section below.
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