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Saturday, July 20, 2024

Bitcoin Remains ‘Significantly Undervalued,’ According to Finance Expert Bill Miller IV

In his latest blog post titled “Why I’m Still Betting on Bitcoin,” financial expert and seasoned investor Bill Miller IV, CFA, CMT, Chairman and CIO of Miller Value Partners, reiterated his bullish stance on Bitcoin. Miller, the son of legendary investor Bill Miller III, believes Bitcoin remains in the early stages of a significant shift in global capital and governance perspectives.

Bitcoin: It’s Still Early

Miller’s analysis begins with a reflection on his 2015 thesis, “A Value Investor’s Case for…Bitcoin?!”. He argued back then that Bitcoin held potential far beyond its valuation at the time, either as a revolutionary payment network or a viable alternative to traditional fiat capital. Fast forward to today, Miller maintains that Bitcoin’s journey is far from over, despite its current market capitalization of about $1.5 trillion—a figure he considers minuscule compared to the nearly quadrillion-dollar global fiat capital system.

“Despite Bitcoin recently hitting new highs against every fiat currency, I believe Bitcoin today is still significantly undervalued and that the world is likely in the early stages of a secular shift around how humans think about capital and its governance,” Miller writes. He points out the inadequacies of current monetary systems, prone to human error and manipulation, often leading to currency devaluation through inflation and mismanagement.

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Supporting Arguments

Supporting his argument, Miller references Lyn Alden’s “Broken Money,” which outlines the historical precedence for superior monetary technologies eventually eclipsing outdated counterparts. Alden’s analysis suggests that when people are presented with better options for preserving or growing their financial resources, they will invariably gravitate towards those options.

“History shows that the best monetary technology inevitably wins, as people trade inferior depreciating capital technologies for superior ones that better align with users’ goal of preserving or growing their option set over time,” writes Miller. Bitcoin, with its decentralized, transparent, and immutable ledger, offers a robust alternative to the governance-laden fiat systems.

Miller delves deeper into Bitcoin’s technical and philosophical underpinnings, describing it as a “true technological breakthrough.” Unlike traditional monetary systems, Bitcoin operates on a global scale without the need for centralized control, enabling transactions resistant to censorship and confiscation. This property alone, according to Miller, radically changes the dynamics of how property rights are transferred and managed across borders and generations.

Understanding Revolutionary Technologies

Miller also comments on the general public’s struggle to understand and value revolutionary technologies, citing substantial returns generated by companies like NVIDIA, Google, and Meta as examples of what happens when new paradigms are embraced. “Humans are notoriously bad at contextualizing the relevance and potential of new technologies,” Miller states, emphasizing that Bitcoin’s case is no different.

“This gap is especially wide for groundbreaking concepts of an epistemic nature – that is, inventions that change the way we think about and relate to information and each other. It also explains why NVIDIA, Google, and Meta have generated outsized returns relative to other stocks,” Miller states.

Conclusion: It’s Still Early

In a compelling conclusion to his argument, Miller acknowledges the inherent risks and volatility associated with Bitcoin. As a technology and asset class that is still in its developmental phase, it faces potential shifts in perception and regulatory landscapes. However, he warns that underestimating Bitcoin’s long-term potential could be as harmful as ignoring the early signs of any major technological shift.

“It’s still early,” concludes Miller, suggesting that the journey for Bitcoin is just beginning. He remains confident that as the world continues to grapple with the limitations of fiat currencies and the possibilities presented by digital assets, Bitcoin’s true value will eventually be realized, reflecting its capacity to redefine the fabric of economic systems worldwide. This stance not only reinforces his investment strategy but also serves as a bold forecast for the future of finance.

At press time, BTC traded at $67,406.


Technical Analysis: Bitcoin (BTC) Price Action

Current Price

Bitcoin (BTC/USD) is trading at approximately $67,406, marking a slight increase in recent sessions.

Key Technical Indicators

  • Relative Strength Index (RSI): The RSI is currently hovering around 60, indicating moderate buying pressure and room for further gains before entering overbought territory.
  • Moving Average Convergence Divergence (MACD): The MACD line remains above the signal line, suggesting ongoing bullish momentum.
  • Support and Resistance Levels: Immediate resistance is at $68,000, with strong support at $66,000. A break above $68,000 could signal further upward movement, while a dip below $66,000 might trigger a short-term correction.

Outlook

Bitcoin’s technical indicators suggest a continuation of the current bullish trend, supported by favorable macroeconomic factors and increasing institutional interest. However, traders should remain cautious of potential volatility, especially with upcoming economic data releases and regulatory developments.

Bitcoin’s ongoing ascent, coupled with Miller’s bullish outlook, underscores the growing confidence in its potential to reshape global finance.


Featured image from CNBC, chart from TradingView.com

Akshit Yadav
Akshit Yadav
Akshit is a dynamic young voice in the blockchain and cryptocurrency space, known for his innovative insights and fresh perspectives. Passionate about the intersection of technology and finance, he brings a youthful energy to his exploration of decentralized systems and digital currencies.

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