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Ruffer Multi-Strategies Fund holds 2.5% of its treasury in Bitcoin

  • Ruffer’s Multi-Strategies Fund invests 2.5% ($15.5 million) of its portfolio in bitcoin.
  • The company has reduced its exposure to gold, which has long been considered as a safe-haven asset, in favor of bitcoin.
  • More institutional capital is flowing into bitcoin.

Another multi-billion dollar firm is betting on bitcoin by holding a portion of its treasury in the leading digital asset. The investment firm Ruffer announced that one of its funds, Multi-Strategies Fund has bought bitcoin worth 2.5% of its portfolio.

The firm which has more than £20 billion in assets under management (AUM), mainly counts charities, pension funds, and individuals and families as its clients.

Ruffer Multi Strategy Fund enters the bitcoin market

The fund added bitcoin to its portfolio as recently as November. Per the notice, “it is a primary defensive move” made after “reducing the company’s exposure to gold.”

Gold was trading above $1,500 per ounce at the start of the year. The price fell to $1,470 in April before reaching its yearly high of more than $2,000 in September. It is currently selling for $1,864, marking modest year-to-date (YTD) gains of more than 20%.

Gold YTD performance | Credit / TradingView

With one of the portfolios of the Multi Strategies Fund managing assets worth roughly $620 million, it means that the funds bought bitcoins worth $15.5 million.

The fund sees the purchase of the digital asset “as a small but potent insurance policy against the continuing devaluation of the world’s major currencies.” The company has its investments tied to gold and inflation-linked bonds. 

Bitcoin is being used as a hedge against some of the market and monetary risks seen by the fund, the company said.

Bitcoin, known for its volatility and wild price swings, has performed well in 2020. Bitcoin is widely seen as a safe-haven asset and a possible hedge against global events that rattle traditional markets. 

Despite the ongoing pandemic that caused panic and massive sell-off when countries began to implement lockdowns, bitcoin has seen overall YTD gains of 170% at the time of writing, according to TradingView data.

Bitcoin’s year-to-date performance | Credit / TradingView

Bitcoin opened the year trading in the $7,000 region but tumbled below $4,000 on some exchanges when selling pressure took over the market in March. However, buoyed by the halving event, increased institutional interest, the PayPal effect, positive sentiments, and long view by hedge fund managers, bitcoin reached a new all-time high of $19,864 on November 30. 

Bitcoin reaches a new all-time high on November 30, 2020 | Credit / CoinMarketCap

Institutional money is flowing into bitcoin

Institutional capital is slowly making its way into the nascent cryptocurrency market as Wall Street and hedge funds see bitcoin as a safe haven asset just like gold.

169-year-old life insurance firm MassMutual recently announced that it had purchased bitcoins worth $100 million.

American financial services firm Square Inc, founded by Twitter CEO Jack Dorsey, owns bitcoins worth $50 million.

Business intelligence firm MicroStrategy Incorporated has invested more than $500 million in bitcoins. 

Bitcoin bull Mike Novogratz has previously said that the leading digital asset’s bull run is a ‘digital gold story,’ with more institutional pathways flowing into the emerging market.

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