Microstrategy is better than a Bitcoin ETF, says Miller Value’s Bill Miller IV

Bill Miller IV, Miller Value Partners CIO, joins ‘Closing Bell’ to discuss Bitcoin ETFs as it falls on its second day.

STEP AND COMPETENCIES BREAD ACCEPTANCE. LET’S BRING IN A CEO AND CHAIRMAN BILL MILLER IV. GREAT TO HAVE YOU ON, CERTAINLY WE WILL GET YOUR TAKE ON LEGACY FINANCIAL ASSETS AND YOUR PORTFOLIO. AS AN OWNER AND BELIEVER IN BITCOIN, WHAT IS THE ADVENT OF THE ETFS MEANING IF ANYTHING

FOR THE FORTUNES OF THE ASSET CLASS? >> I THINK IT REPRESENTS AN ENORMOUS STEP FORWARD FOR INSTITUTIONAL CAPITAL ACCESSING THE ASSET CLASS. BUT I THINK THERE IS ACTUALLY SOMETHING OUT THERE THAT IS ALREADY EXPOSED TO BITCOIN, WHICH WE’VE KNOWN FOR QUITE AWHILE. WHICH IS ACTUALLY BETTER THAN A BITCOIN ETF.

THAT IS MICRO STRATEGY. MICRO STRATEGY IS BETTER THAN, IN MY ASSESSMENT AT LEAST, A BITCOIN ETF FOR A COUPLE REASONS. NUMBER, ONE IT’S MORE LIQUID. AS THE LARGEST OWNER OF DECLINE IN THE WORLD. NOT ONLY, THAT THERE’S NO FEES ATTACHED TO IT. THINK ABOUT THE OPTIONALITY OF OWNING A NEW TECHNOLOGICAL

ASSET AND BEING THE LARGEST OWNER OF THAT ASSET. IT PROVIDES ENORMOUS OPTIONALITY OVER THE LONG TERM. NOT ONLY, THAT YOU’VE GOT A CEO WHO OWNS A BILLION DOLLARS WORTH OF STOCK, WHO OWNS 700 AND $50 MILLION WORTH OF BITCOIN PERSONALLY. HE’S A TECHNOLOGIST, HAS 31 PATENTS TO HIS NAME. HE GETS IT.

WE CAN TALK ABOUT THE ETFS BUT THERE IS ALREADY SOMETHING THAT’S MORE LIQUID OUT THERE ALREADY, AND IT’S REALLY INTERESTING TO CONSIDER THAT. >> MICRO STRATEGY, IT’S PERHAPS MORE LIQUID AT THIS POINT, FOR SURE. BUT ITS VALUE IS ALSO GOING TO DEVIATE FROM THE VALUE UNDERLYING BITCOIN. OF, COURSE THERE IS ALSO A

SOFTWARE BUSINESS AND THE PUBLIC COMPANY AS WELL. >> ABSOLUTELY. THAT’S ONE OF THE THINGS THAT MAKES IT SUPER INTERESTING TO ME. IF THE VALUE DEVIATES FROM THE INTRINSIC VALUE, SO IF THE PRICE GOES ABOVE INTRINSIC VALUE, MICHAEL CAN SELL MORE SHARES UNDER THE OPEN MARKET AND USE THAT CASH TO BUY BITCOIN.

THAT’S AN ENORMOUSLY VALUED CREATIVE THING TO DO IF YOU THINK ABOUT THE HISTORY OF FIAT CURRENCY’S. ALWAYS TO BASING THEMSELVES, RIGHT? THEN YOU HAVE SOMETHING WHO’S SUPPLY, BITCOIN, IT’S COMPLETELY INDEPENDENT OF THE DEMAND FOR IT. THAT’S A VERY VALUE CREATIVE THING TO DO, BUY SOMETHING IN DOLLARS OF VALUE IN BITCOIN.

>> THAT’S GOOD IF YOU ALREADY OWN THE STOCK BUT MAYBE DON’T BE ONE OF THOSE BUYERS OF A NEW EQUITY OFFERING AT A BIG PREMIUM TO INTRINSIC VALUE IF IT IS JUST ESSENTIALLY AN ARBITRAGE. >> SELLING SHARES AT A PREMIUM TO INTRINSIC VALUE BENEFITS ONGOING SHAREHOLDERS. WE DON’T MIND THAT AT ALL.

ON THE OTHER HAND, IF THE VALUE DIPS WELL BELOW THE INTRINSIC VALUE OF THE SOFTWARE BUSINESS PLUS THE BITCOIN, YOU CAN ALWAYS BUY BACK SHARES. HAVING SOMEBODY AT THE HELM OF WHAT IS EFFECTIVELY A CLOSED END FUND, ALLOCATING THAT CAPITAL IS ENORMOUSLY VALUED LONG TERM. >> GOT YOU. AS SOMEONE WHO LOOKS AT

INDIVIDUAL EQUITY AND BOND OPPORTUNITIES OUT THERE WITH A VALUE ORIENTATION, HOW ARE YOU FINDING THE MARKETS RIGHT NOW IN TERMS OF WHETHER THERE IS A RICH SET OF OPPORTUNITIES OR IT IS PICKED OVER AFTER THIS BIG RALLY LAST YEAR? >> NO, I THINK THE BACKDROP RIGHT NOW IT’S ENORMOUSLY

POSITIVE FOR EQUITIES IF YOU LOOK AT WHAT IS GOING ON. I LAUGHED, QUARTER ONE OF THE THINGS THAT WAS REALLY INTERESTING TO ME IS THAT LONG DATED GOVERNMENT BONDS WERE UP DOUBLE DIGITS. NOT ONLY WHERE THEY HAVE DOUBLE DIGITS, THE STOCK MARKET WAS ALSO UP DOUBLE DIGITS. THAT’S A REALLY INTERESTING COMBINATION.

HISTORICALLY SPEAKING AT LEAST, WHEN BONDS ARE UP DOUBLE DIGITS, EQUITIES ARE TANKING BECAUSE PEOPLE ARE BUYING SAFETY. IN THIS, CASE WHEN YOU SEE BOTH OF THOSE THINGS MOVE UP AT THE SAME TIME, IT PROBABLY SUGGEST THE MARKET BELIEVES INFLATION IS RAINED IN AND VERY MUCH UNDER CONTROL, WHICH IS SUPPORTED BY TODAY’S PPI

NUMBERS COMING IN A LITTLE LIGHT. SO, NOW, THE BOND MARKET, THE FED FUNDS FUTURES MARKET IS PREDICTING ROUGHLY AN 8% CHANCE OF A CUT FROM THE FED BY THE END OF THE FIRST QUARTER. THAT’S REALLY INTERESTING IF YOU THINK ABOUT GDP ANNUALIZING AT FOUR AND A HALF PERCENT FOR THE PAST TWO QUARTERS.

WITH THE F