While it’s been a good few months for Bitcoin and the cryptocurrency market, the asset class continues to surf the eye of the storm. The same was evidenced by Janet Yellen’s recent comments on Bitcoin, with the Treasury Secretary asserting that “extremely inefficient” Bitcoin is often used for illicit transactions by many. In fact, just a few hours before publication, New York’s AG Letitia James also echoed something similar after she warned investors that crypto-trading involves “extreme risks.”
And yet, despite all the disclaimers and statutory warnings, Bitcoin continues to hold a steady position on the price charts. How so? Well, institutions may have had a hand in that, with the U.K’s Ruffer being one of them.
The London-based fund manager made waves in the crypto-market last year after it bought Bitcoin worth £550m, with the fund “gaining Bitcoin exposure via the Ruffer Illiquid Multi Strategies Fund and two proxy equities in Microstrategy and Galaxy Digital Holdings.” In fact, according to reports, as of last month, Ruffer had made a $750M profit on its Bitcoin investment, with the same corresponding to BTC’s bull run on the charts.
Ruffer is in the news again after Bitcoin, the world’s largest cryptocurrency, found a popular mention in its half-yearly report. According to the same, an investment in BTC is evidence of the firm’s historical use of unconventional protections in portfolios. The cryptocurrency, Ruffer observed, is “an idiosyncratic asset class which brings something significantly different to the portfolio.”
The firm also went on to rationalize its decision to jump into Bitcoin by asserting that “due to zero interest rates, the investment world is desperate for new safe-havens and uncorrelated assets.” In the firm’s opinion, the market is still at the “foothills of a long trend of institutional adoption and financialization of Bitcoin.”
Curiously, the half-yearly report also noted,
“If we are wrong, Bitcoin will return to the shadows and we will lose money – this explains why we have kept the position size small, but meaningful.”
Finally, it is also worth mentioning that the digital gold narrative was given another shot in the arm by the aforementioned report, with the same classifying Bitcoin and Gold under the same bracket of “anti-assets.”