Bitcoin gets ‘less risky the higher it goes’: Legendary investor Bill Miller breaks

• Legendary investor Bill Miller told CNBC on Friday he sees bitcoin surging 100% in 2021 as more investors add the coin to their portfolios as a hedge against inflation.
• “One of the things that’s interesting about Bitcoin is that it gets less risky the higher it goes, and that’s the opposite of what happens with most stocks,” the Miller Value Partners founder said. 
• He added that he’s not sure when the price of the cryptocurrency will correct, and if investors aren’t ready to stomach another 80% correction, they probably shouldn’t own bitcoin.
• Watch bitcoin trade live here. 

Legendary investor Bill Miller told CNBC on Friday he sees bitcoin surging 100% in 2021 as more investors add the coin to their portfolios as a hedge against inflation.

Miller explained that investors should consider holding 1-2% of their portfolios in bitcoin as opposed to cash, because cash will be a “guaranteed loser” and lose at least 2% in value each year with the current inflation rate. 

“It’s more a risk management strategy than anything else to have a little bit of money in bitcoin,”  the founder and chief investment officer of Miller Value Partners said. 

He added: “One of the things that’s interesting about Bitcoin is that it gets less risky the higher it goes, and that’s the opposite of what happens with most stocks.”

Miller doesn’t have a price target for bitcoin but said he has “price expectations.”

“I think that bitcoin… should probably be up 50% to 100% from here in the next 12 to 18 months. And if you were to ask me the over or under, I would definitely say it would be much more likely to be higher than lower,” he said.

Read more: A Refinitiv research chief outlines 6 key investing themes that will drive markets in 2021 – and explains how you can capitalize on each within your portfolio

Bitcoin has more than doubled in value over the last month, and risen over 30% in 2021 so far. While some bitcoin investors want to take profits off the table now as the price balloons, many investors who haven’t bought in yet are waiting for a correction so they can buy it at a cheaper price.

But Miller told investors who are waiting for the pullback that it already occurred in the first quarter of last year, when the price hovered around $4,000.

“That’s what typically happens. It’s that once things correct, those who are waiting for the correction- they’re waiting for the correction to keep going lower,” Miller said. “And then when they missed it on the upside, they’re asking if they should buy it.”

“We’ve had 3 80% corrections, I think if you can’t take that,then you probably should not own bitcoin,” he added. 

The investor appeared on CNBC days after publishing his fourth quarter market letter, where he said that bitcoin is “best thought of as digital gold”, but has several advantages over the precious metal. 

“Warren Buffett famously called bitcoin ‘rat poison,'” Miller said. “He may…