Bill Miller, a highly respected US-based fund manager and former chairman, chief investment officer at $4 billion investment firm Legg Mason, has revealed that he has invested about 50 percent of his MVP 1 fund in bitcoin.
Miller Invested $1.1 Billion in Bitcoin
On the WealthTrack podcast with Consuelo Mack, hedge fund legend Miller, who oversaw Legg Mason’s portfolio of $728 billion in assets as the principal portfolio manager, stated that his personal hedge fund called MVP 1 has allocated 50 percent of its holdings in bitcoin.
Currently, Miller’s MVP 1 manages over $2.2 billion in assets, mostly for high profile investors and mutual funds. Given that 50 percent of MVP 1’s holdings are invested in bitcoin, Miller’s fund has invested more than $1.1 billion over the past few months.
On the podcast, Miller emphasized that his hedge fund will not sell its bitcoin holdings in the future. Miller also hinted that MVP 1 will not be diversifying its assets in bitcoin to other cryptocurrencies in the market. He said:
“What we’re studying is ways in which we can mitigate risk to the overall fund and the portfolio. It won’t be 50 percent of the fund for that much longer, which does not mean necessarily that we’re going to be selling it.” Miller added that other cryptocurrencies in the market without actual use cases will soon be worthless. “Most of those cryptocurrencies, if monetary history is any guide, will be worthless.”
Miller noted that his son, a Miller Values Partners portfolio manager, pitched him a potential investment opportunity in an upcoming initial coin offering (ICO) that could gain mid to long-term success with a strong market. Several successful billionaire bitcoin investors including Tim Draper have invested in ICOs throughout 2017, some of which demonstrated significant success.
Miller Bought Bitcoin in 2014 at $350
Miller first reportedly purchased and invested in bitcoin in 2014, when the price of bitcoin was $350. At the time, Miller invested 1 percent of his net worth in bitcoin. Although Miller’s net worth has not been publicly disclosed, several analysts have estimated Miller’s net worth to be closer to the $1 billion range.
Under the assumption that Miller has had hundreds of millions of dollars in personal net worth in 2014, Miller could have invested more than a million dollars when the price of bitcoin was $350. A $1 million investment in bitcoin in 2014 would be worth $51.4 million today.
In the upcoming years, as Coinbase CEO Brian Armstrong emphasized, an increasing number of hedge funds and large-scale investment firms will continue to allocate their assets and capital into bitcoin. If tens of billions of dollars in institutional money flow into the bitcoin market in the short-term, analysts expect the price of bitcoin to reach $50,000 by the end of 2018.
“Over 100 hedge funds have been created in the past year exclusively to trade digital currency. An even greater number of traditional institutional investors are starting to look at trading digital assets (including family offices, sovereign wealth funds, traditional hedge funds, and more). By some estimates there is $10B of institutional money waiting on the sidelines to invest in digital currency today,’ wrote Armstrong.