Mm.
Bitcoin and volatility that doesn't seem to ring any bells lately.
While the crypto major has been largely range bound the past few months.
Bitcoin may be second neutral, but traders and other digital assets are buzzing about a possible offseason.
Now Ethereum surged past $3000 and some are now eyeing 4.
Meanwhile, Salon is also seeing strong demand and broke $200 in the password before seeing a pullback.
Maxis aren't concerns.
The bulk thesis remains intact for those stacking fats or s Satoshis.
Joining me this morning is Bill Miller, the 4th chairman, CIO, and portfolio manager of Miller Value Funds.
Bill, good morning.
Thank you so much for joining us.
So a lot of topics to go through.
First and foremost, I do want to get your thoughts on the Trump administration's approach to crypto regulation and some of the clarity we've seen from the nation's capital.
Yeah, thanks so much for having me, Remy.
It's a new day in DC for the crypto industry.
Actually, today is the day that the White House is going to release their report or its working group's report on digital assets.
So there's news every single day in this space, the most dynamic space in finance.
If you look at the bills that were advanced in the past couple weeks.
You have the Genius Act meant to regulate stablecoins.
You have the Clarity Act, which provides clarity.
On how to think about and regulate various types of digital assets, and they had the anti CBDC Surveillance Act advanced as well.
One of the reasons you mentioned earlier, Ethereum's had a little bit of a jump here relative to Bitcoin, I think, is because if you look at the way the legislation's been written, it effectively grandfathers in certain blockchains.
Today, like Ethereum and Solana, which if they were launched under these new regulations, they'd have much more onerous oversight.
So I think people are optimistic that some of these regulations will provide an additional tailwind for these other coins.
From my perspective, these other coins don't really solve the same problem that Bitcoin does, because if you look at the underlying protocol, they operate on what's called proof of state, which is effectively fiat governance recreating a digital form.
Bitcoin is the only token or coin out there that that has this first mover advantage that has energy intensiveness in terms of creating new units.
We think that's a major feature and not a bug, and we think that explains why it continues to make new highs when Ethereum still has yet to make a new all-time high.
Yeah, and Bill, today is a big day in the nation's capital as we have the conclusion of the two day Fed meeting, not to mention the release of that crypto report that all of us will be looking for later today.
But you mentioned Alts here and we're celebrating the 10th anniversary of Atherrium today.
So what is your take when it comes to a potential alt coin season?
Well, it's certainly possible.
If you look at times when Bitcoin's rallied, a lot of times all coins have done better.
And so if we continue to expect Bitcoin to rally, maybe these all coins do continue to go up.
I don't really have a perspective on that because we don't own any of the altcoins.
I think there's a lot of ways to get diversified exposure to them, even if you don't want to pick and choose.
For instance, you could buy coin-based stock.
That's a diverse way to get access to these coins.
But it's certainly possible that they'll do well.
I think the best risk adjusted return continues to be in Bitcoin.
I don't know if you saw a couple of days ago a whale sold supposedly roughly 80,000 Bitcoin.
Over $9 billion I would be shocked if you could sell $9 billion and dump it out of the market in a couple of days in Ethereum without seeing the price absolutely tank.
So you can't have a million different currencies out there that are actually viable.
Bitcoin has the first mover advantage.
It has the attention.
It has the ecosystem growing around it, and we're really optimistic on it over the long term.
Yeah, and Bill, before we move away from what you just mentioned, that whale selling Bitcoin, and you know, you think about if you had been an early adopter, say over a decade ago, that's a significant sell right there, but what do you think was really going on?
Well, if you read the press release from Galaxy Digital, which enacted the trade, they said it was an estate planning, uh, deal for this seller, and I mean, everyone hits their limits and has enough, right?
And so I don't know, it's a good question.
Somebody wanted to do some estate planning, and they did it.
And uh that's what I think was going on.
And finally, before I let you go, give me your take on how you feel about macro factors such as deregulation and what does history really tell you about the environment when it not just comes to small caps but also the digital asset space moving forward.
Yeah, it's a great question.
Well, if you look at the pressure that's been on the dollar a year to date, I mean, I think we started off 6 consecutive months down, 11% lower, and now you have an administration weighing in on monetary policy very explicitly. saying they're trying to jawbone rates lower, that's additional pressure on the dollar for it to move lower.
Now the administration wants not only, you know, additional liquidity out there, they're trying to deregulate the environment, all of which from our perspective is very positive for.
Caps relative to large caps.
If you look at the valuations in the large cap growth space relative to the small cap value space, we're starting to reach extremes in that large cap growth now trades effectively at parity.
In some cases a lot below parity with the 10 year bond, which gives you a guaranteed return for those who hold it to maturity.
So the last time you saw that happen was around 1999 to 2000, after which, you know, we had a similar macro backdrop.
Large cap growth or the S&P 500 went sideways for 5 or 6 years while small cap value absolutely trounced at mid to high teens rates of returns, and we think that history often rhymes.
So we're, we're very optimistic about the small cap value space in this backdrop.
Well, Bill, it was great having you on the show this morning.
Thank you so much for joining us and thank you so much for sharing your insights as well as your perspective.
Thank you, Rey.
It was great to be here.
