London-based asset management firm Ruffer revealed that it made $1.1 billion in profit from its bitcoin investment in five months, The Sunday Times reported on June 6. The firm has about £22.4 billion ($32 billion) under management as of April 30.
Hamish Baillie, an investment director at Ruffer, said the asset management firm initially invested about $600 million in bitcoin in November last year when the price of BTC was below $20,000. The director detailed:
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 explained that stimulus checks have fueled some demand for cryptocurrencies, noting that younger people’s interest in them could falter as lockdowns end and economies reopen.
The investment director expects institutions to keep buying BTC for their portfolios and embrace cryptocurrency as an alternative haven asset.
Regarding whether Ruffer will buy more bitcoin, the director said that it is “certainly not off the menu.” Moreover, he called out “hyperbole and misinformation” surrounding bitcoin’s energy consumption. He also pointed out bitcoin’s “huge social benefits” in countries such as Venezuela. Baillie opined:
“It’s been a wonderful store of value”. Ruffer Said
Ruffer previously explained that its BTC investment “diversifies the company’s investments in gold and inflation-linked bonds, and acts as a hedge to some of the monetary and market risks that we see.” The firm further noted: “Due to zero interest rates the investment world is desperate for new safe-havens and uncorrelated assets. We think we are relatively early to this, at the foothills of a long trend of institutional adoption and financialisation of bitcoin.”
A spokesperson for Ruffer was quoted by Reuters on Tuesday as saying:
“Long term, we remain interested in digital assets and the role they can play in real wealth preservation. In the short term, following the sharp increase in the bitcoin price, we felt bitcoin was exhibiting more risk”.
