Bitcoin: Keep “Hodling”?

Abstract

This case examines a fictional hedge fund manager's decision about whether to maintain his fund's position in bitcoin. It provides an opportunity for students to develop an investment thesis for or against bitcoin, evaluate alternative ways to gain exposure to bitcoin, and consider bitcoin's economic function (e.g., as a currency or commodity). The case can be used in an MBA elective course on fintech, capital markets, or investments. Excerpt Bitcoin: Keep “Hodling”? Whether it goes up or down in the next year, or five or 10 years, I don't know. But the one thing I'm pretty sure of is that [Bitcoin]doesn't produce anything. It's got a magic to it and people have attached magic to lots of things. —Warren Buffet, chairman and CEO, Berkshire Hathaway Inc. I think the average investor should ask himself or herself what do you have in your portfolio that has [Bitcoin's] kind of track record—number one; is very, very underpenetrated; can provide a service of insurance against financial catastrophe that no one else can provide; and can go up ten times or fifty times. The answer is: nothing. —Bill Miller, founder, chairman, CIO, Miller Value Partners In mid-September 2025, John Brown, a hedge fund manager based in Miami, was reviewing his portfolio. His focus was on the fund's position in bitcoin. Brown had initiated a small position in the cryptocurrency (crypto) at the urging of one of the fund's limited partners (LPs) four years earlier. The bet had paid off, with the price of bitcoin more than doubling over the last four years (Exhibit 1). The path to get there, however, had been brutal. . . .