On his latest blog post titled “Why I’m Still Betting on Bitcoin,” financial expert and seasoned investor Bill Miller IV, CFA, CMT, president and CIO of Miller Value Partners, reiterated his bullish stance on Bitcoin. According to Miller, who is president, CIO of Miller Value Partners and son of legendary investor Bill Miller III, Bitcoin remains in the early stages of a secular transformation in global capital and governance prospects.

Bitcoin: It’s still early

We begin Miller’s analysis by reflecting on the thesis he first put forward in 2015 in his article “A Value Investor’s Case for…Bitcoin?!” He argued that Bitcoin had potential far beyond its valuation at the time, either as a revolutionary payment network or as a viable alternative to customary fiat capital.

Brisk forward to today. Miller is watching Bitcoin’s rise in popularity, but maintains its journey isn’t over yet. His current valuation puts Bitcoin’s market capitalization at around $1.5 trillion, which he considers a petite amount compared to the nearly trillion-dollar global fiat capital system.

“Despite Bitcoin recently reaching new highs against every fiat currency, I believe that Bitcoin today is still significantly undervalued and that the world is likely in the early stages of a secular shift in the way people think about and manage capital,” Miller writes . It highlights the imperfections of current monetary systems, which are susceptible to human error and manipulation, often leading to currency devaluation through inflation and mismanagement.

To support his thesis, Miller refers to Lyn Alden’s book, which outlines a historical precedent of superior monetary technologies that ultimately eclipsed their obsolete counterparts. Alden’s analysis suggests that when people are presented with better options for preserving or increasing their financial resources, they will invariably gravitate toward those options.

“History shows that the best monetary technology inevitably wins as people replace inferior, depreciating capital technologies with better ones that better suit users’ goal of preserving or increasing their fixed-time options,” Miller writes. Bitcoin, with its decentralized, clear and immutable ledger, provides a solid alternative to management-heavy fiat systems.

Miller also delves into the technical and philosophical underpinnings of Bitcoin, describing it as a “true technological breakthrough.” Unlike customary monetary systems, Bitcoin operates on a global scale without the need for centralized control, enabling transactions that are resistant to censorship and confiscation. According to Miller, this ownership itself radically changes the dynamics of transferring and managing property rights across borders and generations.

He also comments on the public’s efforts to understand and appreciate disruptive technologies, citing the significant profits generated by companies such as NVIDIA, Google and Meta as examples of what happens when fresh paradigms are adopted. “People are notoriously bad at contextualizing the importance and potential of new technologies,” says Miller, emphasizing that Bitcoin is no exception.

“This gap is particularly vast for breakthrough concepts that are epistemic in nature – that is, inventions that change the way we think about and relate to information and each other. This also explains why NVIDIA, Google and Meta have generated outsized returns relative to other stocks,” Miller says.

In a compelling summary of his argument, Miller acknowledges that the risks and volatility associated with Bitcoin are inherent. As a technology and asset class that is still in its development phase, it faces potential changes in perception and the regulatory landscape. But he warns that underestimating Bitcoin’s long-term potential could be as harmful as ignoring the early signs of any major technological change.

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

At the time of publication, the price of BTC was $67,406.

Featured image from CNBC chart from TradingView.com