British investment management firm Ruffer has revealed that its bitcoin holdings now account for around 3% of its total portfolio of around $ 29 billion. The company believes that we are “at the forefront of a long-standing trend of institutional adoption and bitcoin financing.”
Long Trend of Bitcoin Institutional Adoption
Ruffer gave an update on the company’s bitcoin investment this week in its Investment Manager Review for the period ending December 31. The company wrote:
We obtained our bitcoin exposure through Ruffer Multi-Strategies Fund and two proxy equities in Microstrategy and Galaxy Digital. At the end of the period the combined exposure of these was just over 3%.
The company stated “In the short time since the two stocks were up more than 100% and bitcoin is up 90%.”
On its website, Ruffer declared that its assets under management at December 31 were $ 21 billion (about $ 29 billion). A 3% allocation would mean that the company’s bitcoin holdings are now worth around $ 630 million ($ 861 million). Some media outlets reported that Ruffer’s bitcoin exposure is now 1 billion GBP ($ 1.4 billion). However, a spokesman for Ruffer confirmed to news.Bitcoin.com that the company does not recognize that estimate.
Ruffer unveiled its $ 550 million ($ 750 million) bitcoin purchase in November, which was initially 2.5% of the company’s total portfolio.
“Our logic has been well publicized but in short, we have a history of using unconventional protections in our portfolio. Here’s another example, a small allocation to an idiosyncratic asset class that we think brings something significantly different to the portfolio, ”Ruffer detailed, adding:
Because of zero interest rates, the investment world is craving new safe havens and unconnected assets. We believe we are relatively early in this, at the bottom of a long trend of institutional adoption and bitcoin financing.
While acknowledging the risks associated with bitcoin, Ruffer also sees growing signs of its increasing adoption, which the company believes will have a significant impact on the price of the cryptocurrency.
“Think of bitcoin’s reputation as a risk premium – as we move through the process of normalization, regulation, and institutionalization, the compression of this premium can have a dramatic effect on the price,” Ruffer noted. “If we’re wrong, bitcoin will return to the shadows and we’ll lose money – this explains why we’ve kept the size of the site small but meaningful.”
Ruffer’s chairman, Jonathan Ruffer, said last week that the company’s announcement of its bitcoin exposure “generated a great deal of responses.” He explained:
Our basic logic is that bitcoin becomes a challenger to gold’s status as the one super-currency, the thing to own when fiat currency is shaded.
The chairman explained that his company had “done a lot of work on assessing the risk” of investing in bitcoin, “watching it for a long time.” His company concluded that “it is a unique beast as an emerging store of value, combining some of the benefits of technology and gold,” stressing, “Yes, it is an emerging asset. impractical – but one that makes absolute sense about how we see the world. ”
What do you think of Ruffer’s bitcoin investment strategy? Let us know in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, nor a recommendation or endorsement of any products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use or reliance on any content, goods or services mentioned in this article.