Taxing Bitcoin Doesn’t Make Sense, Says Fund Manager Bill Miller IV

Fund Manager Questions Bitcoin Taxation: “Where’s the Government Work?”

Bill Miller IV, Chief Investment Officer at Miller Value Partners, says taxing Bitcoin may be fundamentally flawed, arguing that Bitcoin ownership requires no support from the government—unlike real estate or traditional assets.

In a recent episode of the Coin Stories podcast hosted by Natalie Brunell, Miller suggested that capital gains taxes on Bitcoin are not justified, as the government doesn’t contribute to the maintenance or verification of ownership rights.

“For them to reach their hand in there doesn’t make a ton of sense,” he said.

Blockchain Replaces Government Property Infrastructure

Miller, a long-time advocate of Bitcoin and the son of legendary investor Bill Miller III, drew a sharp comparison between real estate transactions and Bitcoin ownership.

“When you buy or sell a house, all that recordation tax—those taxes go toward keeping track of who owns what,” Miller explained. “But Bitcoin doesn’t need that. The blockchain automates ownership, without government intervention.”

He argued that Bitcoin operates independently, providing its own system of property enforcement via cryptographic consensus. Therefore, the government’s traditional justification for property taxation doesn’t apply.

“The government didn’t create Bitcoin. The blockchain does that property automation for itself.”

Bill Miller IV spoke to Natalie Brunell on the Coin Stories podcast on Wednesday. Source: Natalie Brunell

Could Bitcoin Ever Face a Property Tax?

When asked whether Bitcoin could eventually be taxed like real estate—i.e., via an annual property tax based on market value—Miller expressed skepticism.

“There’s a good argument for it not to [be taxed that way],” he said, although he stopped short of making a firm prediction.

This echoes ongoing political speculation, including rumors earlier this year that Eric Trump floated the idea of eliminating capital gains taxes on some cryptocurrencies if his father were re-elected.

“Whether that ultimately happens or not, who knows,” Miller said. “But it is very cool that there is no wash sale rule on Bitcoin.”

Tax Uncertainty Keeps Fund Managers Hesitant

Despite growing institutional interest in crypto, Miller pointed out that unclear taxation rules still create barriers for asset managers.

“Even as fund managers, we still have huge impediments to actually buying [Bitcoin] because of bad income classification and ETF timing risks,” he explained. “That all needs to be worked out.”

This ambiguity, Miller added, is why he believes we’re still in the early stages of Bitcoin adoption:

“The taxation rules around it are really interesting. That’s why I continue to say it is still early.”

Who Is Bill Miller IV?

Bill Miller IV follows in the footsteps of his father, Bill Miller III, who famously beat the S&P 500 for 15 consecutive years during his time at Legg Mason. In a 2022 interview, Miller III revealed that he held 50% of his net worth in Bitcoin and crypto-related companies, including MicroStrategy and Stronghold Digital Mining.

Key Takeaways

• Bitcoin ownership doesn’t rely on government infrastructure, so traditional property taxes may not apply.

• Blockchain automates property enforcement, challenging the rationale behind capital gains and property taxation.

• Tax policy uncertainty remains a barrier for fund managers and institutions entering the crypto space.

• No wash sale rule gives Bitcoin holders unique advantages over traditional asset classes.

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