A hedge fund managed by veteran investor Bill Miller gained 46% in the first half, thanks partly to the sharp rise in the price of bitcoin during the period.

MVP1, the hedge fund which Miller established three years ago, has its top positions in Amazon, cosmetics firm Avon, security company ADT and in the cryptocurrency bitcoin.

According to a Bloomberg report, the hedge fund now has assets under management of $126 million. In an interview on January 23 with Institutional Investor, it was reported to be worth $83 million.

Bitcoin Convert

The MVP1 fund reportedly had around 50% of its holdings in bitcoin in 2017, according to an interview with CNBC. And although Miller said it wouldn’t be half of the fund much longer, he added that it didn’t mean he would be selling bitcoin.

Bitcoin would have certainly been one of the biggest money-spinners in his fund during the first half. Ending 2018 at $3,709, the bitcoin price rallied to as high as $13,064 in late June, before finishing the first half at $10,819. On Friday, July 26 it was trading around the $9,800 mark.

In his interview with Institutional Investor in January, he said of his investment in Bitcoin:

I’m not a Bitcoin bull, but an observer. It’s a fascinating technological experiment that might fail and be worth zero. But if not — and so far, it hasn’t — there’s the right tail-to-return distribution.

He added:

You can’t gauge the long-term potential of something by how much it falls in one or two years.

Institutional Investment Growth

Certainly some of bitcoin’s rise during the first half of 2019 must be attributed to growth in institutional investment. 

Earlier this month digital assets fund manager Grayscale reported its strongest quarterly inflows in a year – a 100% increase quarter-on-quarter, with 84% of that coming from institutions such as hedge funds.

Miller spent 35 years with Legg Mason Capital Management, rising to the positions of chairman and chief investment officer, before leaving in 2016.

He now manages his own investment company from his Baltimore office called Miller Value Partners, with his two sons as partners, worth around $2.3 billion. As of January, according to the Institutional Investor interview, the firm’s flagship Miller Opportunity Trust has assets under management of more than $1.5 billion.