Bitcoin Could be 'Worth A Lot' or 'Worth Zero', Says Billionaire Hedge Fund Manager

Omar Faridi

Bill Miller, the founder and chief information officer (CIO) at Miller Value Partners, a Baltimore, Maryland-based investment management firm, has said bitcoin (BTC) could potentially be very valuable. Miller however, cautioned investors that the flagship cryptocurrency may also tank to zero.

Bitcoin Is Interesting Because It's "Not Correlated" To Traditional Market Assets

During an interview with CNBC (on January 7th), Miller remarked:

I like bitcoin because it’s not correlated with [the traditional stock market]. It does have the potential to be worth a lot, and the potential to be worth zero.

When digital currency prices reached their all-time highs in December 2017, Miller’s firm invested $1 billion in bitcoin. As CryptoGlobe reported in late July 2018, the 68-year-old Miller revealed he had invested a “big chunk” of his assets (around 1% of his personal net worth) in bitcoin. However, the experienced portfolio manager said he had scaled back his company’s allocation to digital assets due to the uncertainty created by the extended crypto bear market.

Bitcoin Is Still "An Intellectual Experiment"

Last year, Miller had said bitcoin was “interesting” and that it had a fair chance of achieving mainstream adoption as a store-of-value (SoV). Miller had also pointed out that he thinks most altcoins are “probably worthless.” Expressing views similar to those of Wences Cesares, the CEO of Xapo, a cold storage solutions provider for cryptos, Miller has referred to bitcoin as an “interesting technological experiment.” He has recommended that all investors should try to learn more about bitcoin.

However, Miller clarified that he’s not bullish on bitcoin as there’s a chance it may be worth nothing in the foreseeable future. According to the former research director at Legg Mason Capital Management, there’s no correlation between the performance of traditional stock market assets and bitcoin’s price movements. This is what he likes most about the pseudonymous cryptocurrency.

Miller argued: 

Bitcoin basically has no statistical correlation with stocks or bonds, which makes it an excellent diversifier.

As covered, Anthony Pompliano, a well-known crypto analyst and partner at Morgan Creek Digital Assets, has also said that bitcoin (BTC) is still a “non-correlated asset."

No Correlation With Traditional Assets

Pompliano, an economics and sociology graduate from Bucknell University, explained that “if [we] look at the correlation between” bitcoin and the S&P 500 (US stock market index based on the market cap of the 500 largest NYSE or Nasdaq-listed firms) over the past 6 months, then “it’s at zero.”

He also mentioned that “if we look at the Dow index" (Dow Jones Industrial Average), its correlation with BTC is “near zero.” This clearly “proves” that bitcoin is “not correlated”, Pompliano noted. His firm “expects [this] to continue”, but still only recommends investing about “1 to 2% into bitcoin.”

Winklevoss Twins: Wall Street Has Been “Asleep at the Wheel” Regarding Bitcoin

Michael LaVere
  • Winklevoss Twins say Wall Street has been "asleep at the wheel" in acting on bitcoin.
  • Retail investors hold an advantage over institutions in the crypto marketplace. 

Cameron and Tyler Winklevoss, who founded the cryptocurrency exchange Gemini, said that Wall Street has been “asleep at the wheel,” in regards to bitcoin in their most recent interview. 

Sleeping on Bitcoin

Speaking with CNN Business on Aug. 22, the Winklevoss Twins explained the value of bitcoin as an investment, while giving their opinion on the risks of the cryptocurrency industry in comparison to the traditional financial sector. 

They were also critical of the established market’s slow acceptance of bitcoin and cryptoassets, claiming that Wall Street has fallen behind in that regard. Tyler Winklevoss argued that retail investors have had the edge of institutions in the market of crypto through their willingness to explore the new asset class. 

He continued, 

“Unlike the internet, which you couldn’t buy a piece of, you can actually buy a piece of this new internet of money. It’s still a retail-driven market, from day one [...] and a lot of people have done really well. Wall Street has been asleep at the wheel.”

In addition, the twins claimed not to be deterred by the high price volatility of bitcoin, and said the risk of missing out was much more compelling, 

“We had to invest because we were afraid of missing out, we couldn't miss out on this future.”

The twins also compared bitcoin to gold, which is becoming a more common financial analogy as investors and analysts view BTC as a digital store of value.