Bill Miller, a portfolio fund manager at Legg Mason Capital Management, made an appearance on CNBC’s “Squawk Box” program and told the hosts that he disagrees with Warren Buffett’s latest assessments on the peer-to-peer decentralized digital currency bitcoin.
Buffett, who has been a staunch opponent of the virtual currency, has said before that he doesn’t believe bitcoin is a legitimate currency nor does it maintain a store of value. He concluded last month that he doesn’t think bitcoin will be around within the next 10 to 20 years because it’s all a “mirage.”
This irked the bitcoin community, including Miller, who made bitcoin headlines in March when he highlighted the potential benefits behind the virtual currency as well as its fascinating experimental nature.
“I have enormous regard for Warren, but I think there’s a logical flaw in his thinking here,” said Miller. “It may very well be the case that bitcoin is worth nothing, but I think it’s a really interesting intellectual and technological experiment.”
Despite the drop in the value of bitcoin, Miller explained that he remains optimistic about its future. He later made the comparisons between the digital currency and gold and noted that the yellow metal has relatively no value when attempting to purchase goods and services.
Essentially, the possible benefits in bitcoin far outweigh the risks associated with it. Since making his initial investment in bitcoin, he has lost about one-fifth. However, Miller made the case that bitcoin is a hazard that he is willing to make an investment in.
“If it becomes only 10 percent as popular as gold, then it’s an $800 billion market value,” added Miller. “You can lose 100 percent of your money, or you can make 120 times your money. I think the risk reward is OK.”
Bitcoin makes a splash on Wall Street – A Roundup
Late last week, it was reported that the Bitcoin Investment Trust (BIT) now holds more than 100,000 bitcoins ($40 million), according to Barry Silbert, CEO of SecondMarket and founder of the trust. It is expected that Silbert will have even bigger plans for BIT sometime during the fourth quarter of this year.
The Winklevoss Bitcoin Trust is in the midst of its regulatory approval and now comes news that it could be approved by the end of the year and will be established as an official exchange-traded fund (ETF). Each share will represent an amount of bitcoin held by the Trust.
Mt. Gox was in the news again last week when it was discovered that a group of investors have offered to acquire the bankrupt bitcoin exchange for one bitcoin ($450). Filed at the Tokyo District Court last month, Brock Pierce, CEO of GoCoin, venture capitalists Matthew Roszak of SilkRoad Equity, and William Quigley of Clearstone Venture Partners are on the verge of reinvigorating the troubled platform.
