In the event of Crypto-Failures: When the Dust Settles, Bitcoin will Continue to be King
Perspectives are, for want of a better word, divided on the subject of cryptocurrencies. Whether Bitcoin will be overtaken and bested by nimble, more efficient Alt-coins, or that Bitcoin is a behemoth that will never be shifted from its throne.
One financial expert, however, has been a keen advocate for Bitcoin and Bitcoin only against the entirety of the cryptocurrency market. He's gone so far as to suggest that all other cryptos are worthless compared to Bitcoin for the future.
This expert is Bill Miller, who is a decades-long veteran of the financial world with a net worth of $2 billion to go with it. In an interview with Bloomberg, Miller made his position as clear as crystal.
— Bloomberg TV (@BloombergTV) July 27, 2018
In speaking to Bloomberg, Miller also made it clear that he is a Bitcoin-booster, claiming to have a significant stake in the crypto related to a partnership he works with. Along with this stake, Miller has maintained a pro-crypto stance: investing roughly $1bn of his own assets into it.
It's safe to say that he advocates on behalf of Bitcoin with a very significant amount to gain or lose depending on its longer-term performance.
“It is an interesting technological experiment, that we don’t know how it is going to come out,” Miller argues.
“Right now, at $7,800 or wherever it is today, is much less risky than when it was at $100, for the reason that every day that it doesn’t blow up, go to zero, or get regulated out of existence, is that more money is going to flow into the ecosystem.”
Not well-known to most crypto investors, but acutely obvious to Miller as to why Bitcoin enjoys a position of strength is due to the inbuilt scarcity mechanics that coincide with the mining of Bitcoin, with only 17 million of the total volume of crypto being out there.
With this factor in mind, Miller believes that if every single millionaire (25 million in total) were to acquire one, the intrinsic value of Bitcoin would increase sharply.
About Altcoins? They're worthless – According to Miller
Taking the scarcity into account, along with the level of value that it enjoys to a certain extent, Miller argues that Bitcoin enjoys a relatively strong level of financial stability compared to more volatile altcoins.
Miller goes as far as to refer to the almost 1600 various types of alt coins as ‘worthless' in comparison. He goes on to state that cryptos which boast a higher level of market capitalization translate to longer-term success, making Bitcoin and Ethereum, the latter of which Miller states trails the ‘digital gold' by a significant margin.
For the cryptocurrency market, observers are made up of two distinct perspectives: the first being those spectating from the outside of it, reiterating that cryptos like Bitcoin have no ‘intrinsic value' due to its inability to generate profit, but instead relies on a level of perceived value from investors.
The second camp consists of those who are ensconced in the world of cryptocurrency, believing that Bitcoin being swatted down for a lack of intrinsic value is due to a misconception, with Bitcoin being wrongly compared to public-traded companies and assets.
From Millers investment history, he sits firmly in the perspective of the latter, believing that there are a number of different ways to measure the value of Bitcoin fairly. One of the ways in which Miller believes Bitcoin should be measured is as a “non-correlated asset that is most similar to gold.”
This comparison puts it in the same leagues as precious metals, in that it has value deriving from its status as an investment asset, but also as an item with value as an alternative currency.
In Miller's and many other investors views, Bitcoin may, in the future, may come to be known as a future gold, or ‘Digital Gold'. What this means for the future is that banks may come to invest in a varying volume of Bitcoin as an asset to add to existing reserves such as gold.
If this were to become the future scenario, the value of Bitcoin would indeed explode as Miller believes it has the potential to do. Miller closed the interview with the belief that diversity is still required from cryptocurrency investments, with each investor playing a “positive expectation lottery ticket” that could multiply to “10, 20 or even 50% of your assets in a couple of years.”