A few major names in the worlds of finance and entertainment made bullish statements on bitcoin (BTC) in the past couple of days, while even a well-known BTC skeptic said that it’s “maybe a partial store of value.”
“It’s been a great month for bitcoin, but it’s also been a great year-to-date, three years, five years, and ten years […], and it’s been the single best performing asset category in any of those periods,” said in a recent CNBC interview Bill Miller, known as a legendary investor and a co-founder of investment advisor Miller Value Partners. Miller added that “its staying power gets better every day,” and that “risks of bitcoin going to zero are much, much lower than they’ve ever been before.”
Furthermore, there is greater adoption, he said, giving MicroStrategy, Square, and PayPal as recent examples.
He said that,
“The bitcoin story is very easy, it’s supply and demand. […] Bitcoin’s supply is growing around 2.5% a year and the demand is growing faster than that. So I think […] every major investment bank, every major high net worth firm is going to eventually have some exposure to bitcoin or what’s like it, which is gold, or some kind of commodities.”
It’s not the first time Miller shows his support to BTC as he himself apparently is one of the first investors in this most popular cryptocurrency – he claims to have bought bitcoin at an average price of about USD 300.
Meanwhile, according to analysts at investment banking giant JPMorgan, “some investors that previously invested in gold exchange-traded funds (ETFs) such as family offices, may be looking at bitcoin as an alternative to gold.” The analysts based this idea on the fact that the Grayscale Bitcoin Trust is outperforming gold exchange-traded funds.
This time, institutional investors are driving the bitcoin demand, instead of only “the younger cohorts of retail investors,” that is, millennials. The report argued that corporate endorsements of bitcoin, particularly the one made by PayPal in late October, “appear to have propagated further demand for bitcoin.” Furthermore, the institutional investors seem to be the biggest investors in the Trust “perhaps reflecting their preference to invest in bitcoin in fund format.”
The analysts added that a potential long-term upside for bitcoin is “considerable if it competes more intensely with gold as an ‘alternative’ currency given that the market capitalization of bitcoin would have to rise 10 times from here to match the total private sector investment in gold via ETFs or bars and coins.” However, they added that momentum traders amplified the recent bitcoin rally, and the sharp spike in prices led BTC “close to overbought levels on our momentum signal framework, something that could potentially trigger profit taking or mean reversion flows.”
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