Miller Opportunity Trust, a hedge fund owned by American investor and fund manager, Bill Miller has filed a document with the U.S Securities and Exchange Commission stating its intention to get into Bitcoin.
Institutions Not Done with Bitcoin
The hedge fund which made its name in trading securities, derivatives, and other financial instruments is now looking to add the largest crypto asset by market cap to its portfolio.
The Trust Fund (the crown jewel of Miller Value Funds) says it will be taking steps in this direction and will invest up to 15% of its $2.25 billion assets into Grayscale’s Bitcoin Trust.
This puts their intended stake in Bitcoin just north of $300 million that will be invested into Grayscale. But this is not the first time Bill Miller has allocated funds to the crypto asset. In 2017, Miller went bullish on Bitcoin and invested 50% of its holdings through a hedge fund named MVP 1.
American investor Bill Miller has been quite vocal about his Bitcoin belief. He once described Bitcoin as an “emerging” technology built on a “brilliant, logically consistent protocol with distributed governance,” in an income strategy letter.
As cryptocurrency prices pick up steam and break through barriers, a number of institutional investors are flocking to the asset. What’s more? Conservative tech companies like PayPal and VISA are also adopting the world’s most coveted reserve asset.
The last few months has seen a flurry of Wall Street heavyweight come out to invest in bitcoin. With the series of adoption by legacy firms and the presence of more regulation in a sector many have termed infant, there are now more positives to investing in digital assets than they were in 2017.
Grayscale’s Enticing Proposition for Large Investors
Large investors prefer to use Grayscale’s Bitcoin Trust (GBTC) as their way of investing in Bitcoin without necessarily holding the asset. Grayscale’s trust is a financial vehicle that allows investors to publicly trade shares in trusts that hold large pools of Bitcoin.
Miller’s choice of using Grayscale would grant the firm an indirect exposure to Bitcoin without them being a hodler. Grayscale’s Trusts offers auditable ownership of Bitcoin through traditional investment vehicles. There are many reasons why large investors prefer to use GBTC to gain exposure to Bitcoin. One of them is the absence of a laundry list of items to worry about it. You don’t have to concern yourself about storage or security. The trust handles everything.
Another point is the tax benefits. Publicly-traded trusts benefit from tax breaks on investment compared to cases where an investor buys bitcoin outright. Some investors have also chosen the acquisition route. Case in point: Morgan Stanley’s stake in MicroStrategy.
The financial giant purchased more stock in the business intelligence firm, best known for converting its treasury into Bitcoin. Morgan Stanley now holds 10.9% of MicroStrategy. As with GBTC, MicroStrategy’s shares are largely tracking Bitcoin’s price. The bank’s move is an alternative means for large investors to benefit from Bitcoin’s rally without actually holding the asset.