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A hedge fund manager has revealed that 30% of its fund's assets are allocated in bitcoin.
Bill Miller, a former mutual fund manager of the Legg Mason Value Trust, broke the market for 15 consecutive years before losing 55% in 2008 following the Great Recession. Now, Miller runs Miller Value Partners LLC, an investment company that manages $ 2.3 billion in assets. One of Miller's offerings, the $ 154 million hedge fund MVP 1, has posted a 72.5% gain since the beginning of the year. The secret of the success of MVP 1? Bitcoin.
As reported by the Wall Street Journal, MVP 1 currently has 30% of its assets allocated in bitcoin. Since the purchase of bitcoin at $ 350, MVP 1 has seen the value of cryptocurrency increase by 1650% to reach a current value of $ 6,125.
Miller says that the fund currently has no plans to add to its bitcoin stake, mainly because it's impossible to predict whether bitcoin will ultimately fail. Skeptics like JPMorgan's CEO Jamie Dimon have called Bitcoin a "fraud" that will inevitably prove valueless, and speculators like hedge fund manager Mark Yusko think his price could go up to $ 1 million.
However, Miller argues that bitcoin is an "experiment", and no one can be certain of its future trajectory:
"My view on Bitcoin is that it's a technological experiment that may or may not prove sustainable," Miller wrote in a recent letter to investors. "Bitcoin has a market capitalization greater than 90% of the S & P 500 companies, but it could still fail.I do not know and no one else knows, even if they are certain of their opinion . "
That said, Miller also said that the future prospects for bitcoin are increasing with each passing day.
"I believe that there is a non-trivial chance that bitcoin will reach zero," Miller concluded, "but every day no, that chance declines as more venture capital flows into the world." Bitcoin ecosystem and more people become familiar with bitcoin and buy it. "
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