Bill Miller, a former Legg Mason executive and a respected hedge fund manager, has recorded a 46 percent return year-to-date in 2019, with bitcoin and beauty product company Avon as key picks.
Despite the decline in the price of bitcoin from $14,000 to $9,700 in the past several weeks, year-to-date, the dominant cryptocurrency has seen an increase of around 164 percent as one of the best-performing assets in the global market.
Various fundamental factors including a consistent increase in the inflow of capital from institutional investors, the imminence of the block reward halving of the Bitcoin blockchain protocol in 2020, and the emergence of well-regulated trading venues have boosted the sentiment around the sector.
Grayscale, a crypto investment firm with more than $2 billion in assets under management, disclosed in its 2019 Q1 report that institutional investors accounted for the overwhelming majority of investments into their products.
“Institutional investors comprised the highest percentage of total demand for Grayscale products in the first quarter (73%). This was also consistent with their share of inflows over the trailing twelve months (73%). As we have mentioned in previous reports, many institutional investors may view the current drawdown as an attractive entry point to add to their core positions in digital assets,” read the report.
Miller publicly expressed his optimism towards bitcoin as a store of value in January 2019 on CNBC’s The Exchange, stating that BTC has the potential to evolve into a major asset that could be worth “a lot” in the long term.
At the time, Miller said that bitcoin could be considered as a viable diversifier from stocks and bonds.
“Bitcoin basically has no statistical correlation with stocks or bonds for that matter, which makes it an excellent diversifier,” he said.
In the short term, Miller said that the current macro landscape of the U.S. equities market is seemingly positive with the Federal Reserve considering a potential decline in interest rates amidst intensifying geopolitical risks.
“With the economy growing modestly, the Fed about to embark on an easing cycle and inflation quiescent, the extreme diversion in valuations between bond proxies such as utilities and consumer staples and cyclical value stocks, is likely to begin reversing. This represents an excellent opportunity for investors to earn excess returns,” he told Bloomberg.
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Last modified: March 4, 2021 2:39 PM