Some believe that Bitcoin Market Crash is just around the corner, with billions of dollars of BTC value lost in 2022. The cryptocurrency market has been largely unregulated since it began to grow back in 2008. Now, some experts have predicted that this might be its downfall as it’s hard for traditional financial institutions to keep up with Bitcoin and other cryptocurrencies.
After rocketing last year, bitcoin and cryptocurrencies are having a tough start to 2022.
While bitcoin’s price has recovered somewhat, it remains under pressure as crypto investors brace for a $10 trillion earthquake. After starting the year at almost $50,000 per bitcoin, it fell to lows of $32,000 in January.
Investing legend Bill Miller has revealed his “very big” bitcoin holdings, saying bitcoin is an insurance against potential “financial catastrophes.”
Miller Value Partners chairman and chief investment officer Mark Miller told CNBC in an interview this week that publicly-traded bitcoin miners, which use high-powered computers to secure the bitcoin blockchain in return for freshly-minted bitcoin, are like insurance policies..As we saw in Lebanon, Afghanistan, and many other countries around the time of the pandemic, Bitcoin is an insurance policy against financial catastrophes.
Reuters reports that Lebanon’s government announced a devaluation of the Lebanese pound by 93% last month as part of its plan to address the country’s long-running financial crisis. In Afghanistan, after the Taliban seized control and the former government collapsed last summer, cash shortages have aggravated an already deep economic crisis and skyrocketing inflation. With the Covid-19 pandemic over, lockdowns have been lifted and economies remain awash with stimulus money from the pandemic.
It is not desirable to have an insurance policy with intrinsic value, said Miller. “You don’t want to have your house burn down, or be involved in a horrible accident, but you pay for insurance every year in case that happens.”
Miller also clarified comments made in January that implied he had invested half of his wealth into bitcoin and other cryptocurrencies. He said only a few percent of his net worth had been invested in bitcoin, which grew to become half his total wealth as bitcoin prices rose.
There are now fewer bitcoins, because the price has dropped half since November, but it is still a very large position, he said, without providing any specific numbers.
The reputation of bitcoin as a safe haven asset and a hedge against inflation has grown over the last few years as its price has risen, with some expecting it to eventually supersede gold. In 2020, renowned investor Paul Tudor Jones announced he had begun buying bitcoin, and he described it as a “safe haven asset.”
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Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
