American fund manager Bill Miller believes that bitcoin is still in the “very early” stages of distribution, despite the fact that its capitalization already exceeds that of financial giants such as JP Morgan and Berkshire Hathaway.
“Bitcoin has become the most successful asset category in 2020. It outperforms all major asset classes in one, three, five and ten years, ”writes Miller in his fourth quarter market survey.
The investor notes that the Fed’s policy for the near future is to reduce the real value of assets placed in fiat currency. At the same time, a number of companies, such as Square, MassMutual and MicroStrategy, chose to convert their fiat reserves to bitcoin, rather than incurring “guaranteed losses”.
“At this stage, bitcoin is better perceived as digital gold, although it has many advantages over the yellow metal. If inflation rises, and even if not, and more and more companies decide to diversify small portions of their cash balances with Bitcoin, then the current relative trickle in cryptocurrency will become a torrent, Miller adds. – Warren Buffett said the famous phrase that bitcoin is “rat poison”. It is possible that he was right. Bitcoin may be rat poison, but traditional money will be the rat. ”
Miller also notes that markets may be underestimating the magnitude of coming inflation:
“The speed of money circulation remains rather depressed by historical standards. But savings rates are unusually high, and along with the “normalization” of the economy in the second half of the year, the likelihood of accelerating consumption, and with it the speed of money circulation, increased. High liquidity and an increase in the speed of money circulation can very quickly put upward pressure on inflation. ”
Miller said in November that he expects capital inflows into Bitcoin from all major investment banks.
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