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Even crypto industry experts might agree with Warren Buffettâs description of Bitcoin, under this interpretation.
Famous investor and Berkshire Hathaway CEO Warren Buffet called Bitcoin "probably rat poison squared" back in 2018. In his 2020 fourth-quarter market letter, financial analyst Bill Miller agreed with Buffettâs description of the asset â but not without his own addendum.
âWarren Buffett famously called bitcoin ârat poison,ââ Miller said in his Saturday letter, adding:
âHe may well be right. Bitcoin could be rat poison, and the rat could be cash.â
Miller started his letter by explaining how each new year often paves the way for various financial predictions. Financial expectations and projections can be worthless, however, as proven by the unexpected COVID-19 pandemic and its ripple effects, according to Miller. Still, projections can be beneficial if the rationale for such predictions is taken into account.
That said, Miller went on to analyze the current scene in the United States regarding markets, inflation, interest rates and other points, pointing out the value of comprehending the present landscape as opposed to predictions.
He concluded his letter with a paragraph about Bitcoin (BTC), giving a shout out to the coinâs standout results last year. âIts market capitalization is greater than JP Morgan and greater than Berkshire Hathaway and yet it is still very early in its adoption cycle,â Miller said.
âThe Fed is pursuing a policy whose objective is to have investments in cash lose money in real terms for the foreseeable future,â Miller added, subsequently noting the trend of large mainstream players buying the asset. In 2020, MicroStrategy, MassMutual and several others bought large stacks of Bitcoin. MicroStrategy, in particular, bought Bitcoin in part to escape inflation-induced cash value loss.
âPaypal and Square alone are estimated to be buying on behalf of their customers all of the 900 new bitcoins mined each day,â Miller said, adding:
âIf inflation picks up, or even if it doesnât, and more companies decide to diversify some small portion of their cash balances into bitcoin instead of cash, then the current relative trickle into bitcoin would become a torrent.â
Bitcoin has recently soared in price, cracking the $35,000 mark as it continues gaining mainstream adoption.
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The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.