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Bitcoin is hitting lows it hasn’t seen in months, but it’s not deterring bulls from investing more into the market that’s gaining more and more attention.
Bill Miller, a previous self-stated “Bitcoin observer” has now noted that he’s become a Bitcoin bull. Confirming this statement, Miller now holds 50% of his entire net work in Bitcoin and other related crypto-investments. Part of his digital asset investment also lies in crypto investment firms like MicroStrategy (spearheaded by another Bitcoin proponent Michael Taylor) and Stronghold Digital Mining. The rest of his investment profile, he stated, lives in Amazon shares.
Professional investment, buying the dip
As an early adopter of Bitcoin, Miller bought his first token in 2014, when the market was still tiny and Bitcoin demand was low. At the time, it was trading for around $200. Since then, he did not buy for years, until it faced a major correction and dropped after reaching all time highs last year. He said:
“This time I started buying it again at $30,000, down from $66,000 and the reasoning was there’s a lot more people using it, there’s a lot more money coming in from the venture capital world.”
Bitcoin as a hedge against inflation and financial concerns
While Bitcoin might have taken a knock when the Federal Reserve released the minutes after the December meeting, Bitcoin’s limited supply and scarcity makes it a way to hedge against inflation in the fiat economic system. The dip that Bitcoin took after the minutes were released came at the same time as an overall market drop – a direct impact from the contents of the meeting. In the minutes, the Fed noted that it would be counteracting inflationary pressure with action points. These included reducing their balance sheet (and bonds as a result) and increasing interest rates a lot sooner than expected. This means that money, which has been accessible and it’s been easy to get a loan, will become a lot more difficult because money printing will be reduced to decrease the rapid rate of inflation.
This has come as a financial knock across sectors, with tech-focused shares taking a bigger knock than others. Interestingly, Bitcoin and cryptocurrency have been considered tech-assets by enough investors to make the market move as well. Despite this, Bitcoin is hailed by high-profile investors like Miller as a hedge against “financial catastrophe.” Year-on-year, not only has Bitcoin been out-performing gold, but it also still has a small enough market cap to be accessible for new investors. Miller – and other traders and investors – take the opportunity to buy the dip and bet big on Bitcoin while the value is lower. Miller recommended that retail investors take at least 1% of their investment and put it towards Bitcoin. He said:
“I think the average investor should ask himself or herself what do you have in your portfolio that has that kind of track record — number one; is very, very underpenetrated; can provide a service of insurance against financial catastrophe that no one else can provide; and can go up ten times or fifty times. The answer is: nothing.”