UK-based asset manager Ruffer said it made a $1 billion profit in Bitcoin after investing in the leading cryptocurrency for only five months.
Ruffer made a massive profit from Bitcoin investment
The past few months have seen numerous financial institutions enter the cryptocurrency market. They were previously unsure about the market, but the growth and adoption have convinced many of them to invest in cryptocurrencies.
Ruffer, an asset management firm based in the UK, invested $600 million in Bitcoin in November 2020. The firm made a profit of $1 billion after selling its bitcoins earlier this year. Hamish Baillie, an investment director at Ruffer, told The Times that the firm held the investment for five months. However, he pointed out that they had to sell because young people are no longer spending too much time trading since the lockdowns are ending.
“When the price doubled, we took some profits for our clients in December and early January. We actively managed the position, and by the time we sold the last tranche in April, the total profit was slightly more than $1.1 billion,” Baillie said.
Ruffer invested in Bitcoin in November. At the time, Cryptonary reported that the firm held 2.5% of its treasury in Bitcoin. According to Ruffer, the investment in Bitcoin was short-term, and it was caused by the lockdowns and the US government handing out cheques to its citizens. Baillie stated that the younger people used their money to buy cryptocurrencies such as Bitcoin.
Although the company has sold its Bitcoin investment, Baillie said financial institutions like Goldman Sachs and Ruffer would continue to buy bitcoins, leading the cryptocurrency to become a mainstream asset within investment portfolios.
There is misinformation about Bitcoin’s energy usage
One of the key discussions in the cryptocurrency world recently is Bitcoin’s massive energy usage. Elon Musk is at the heart of this criticism, as he claims that Bitcoin’s environmental footprint is large.
However, Baillie doesn’t agree with this point. “There is a lot of hyperbole and misinformation out there when it comes to bitcoin’s carbon footprint. Bitcoin uses less electricity than the gaming industry,” he added. Baillie further pointed out that miners use renewable energy due to the energy costs of regular power. “Probably somewhere between 40 percent and 70 percent of the electricity used is coming from renewable sources,” he said.
Ruffer has shifted its Bitcoin investment profits into other protective assets as the company looks to ward off inflation.