Legg Mason Chairman: Potential return on bitcoin is huge

As the Chairman and CIO of Legg Mason Capital Management, Bill Miller is used to thinking big. His company manages an estimated $695 billion in assets, making it one of the top 20 investment management groups in the world. Miller is very much an insider in the world of high finance, and the kind of person other investment leaders listen to. Speaking on Bloomberg TV’s “This Matters Now,” Miller also made it clear that he’s paying attention to bitcoin.

“Investing in or buying bitcoin is like a venture bet,” Miller said. “You don’t know what’s really going to happen, but the potential return is huge. The amount of gold in the world is about $8 trillion, and the value of all the bitcoin is about $7 billion. So, if the real value of bitcoin is one tenth that of gold, you’ll make 100 times your money.”

Although he’s personally invested in bitcoin, Miller was quick to point out Legg Mason doesn’t work with bitcoin. At the moment, at least. “When Bloomberg can get a quote on it, and when it can be securely stored, it’s a possibility.”

Miller also noted that the claims of bitcoin’s volatility weren’t particularly accurate. He noted that gold has gone from $35 an ounce in the late 1960s (about $255 in 2014 dollars) to nearly $2,000 an ounce just three years ago, and dipped below $1,200 only a few months ago. “[Gold] has been volatile, too. Currencies are volatile.”

Miller also noted that bitcoin was currently more useful than gold.

“You can buy stuff [with bitcoin] on Overstock.com right now. You can’t buy much with gold, but you can with bitcoin.”

What does Miller see in the near future for bitcoin? Increasing adoption of the currency, as well as increasing regulation: “I think it does [need regulation]. Because of its potential function, the regulators are going to be involved in it, one way or the other.”