Asset manager Ruffer has cashed out more than $1 billion in profit less than six months after investing $600 million in Bitcoin.
Back in November 2020, Ruffer made a $600 million Bitcoin investment. Speaking to The Times, Hamish Baillie, investment director at the asset management firm, disclosed that his company closed its Bitcoin position for more than $1.1 billion in profit in April. He said:
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 asserts that his firm was one of the first fund managers to purchase Bitcoin in a rare short-term investment. At the time of the investment, the leading cryptocurrency was trading at around $15,000. It was also seriously pushing to retest its 2017 all-time high of nearly $20,000.
The investment director claims that Bitcoin’s late 2020 rally was due to the pandemic lockdown and stimulus payouts in the United States. Interestingly, Baillie revealed that Ruffer opted to sell its Bitcoin holdings partly because younger investors would no longer be trading like before since the lockdowns are ending.
Ruffer has moved the profits from the Bitcoin trade into other so-called “protective” assets such as inflation-linked government bonds. However, Baillie noted that Ruffer may not be done with its Bitcoin investment. He is confident that major financial institutions such as his firm and Goldman Sachs, will continue to buy Bitcoin.
If you have a multi-asset strategy then things that behave in different ways are really helpful. There’s no point being multi-asset if all your different assets move with the same dynamics.
Here for the gains
Ruffer is not the only institutional investor that has dabbled into cryptocurrency. Data from Bitcointreasuries.org suggests that 36 publicly traded companies currently hold Bitcoin on their portfolio, with MicroStrategy, Tesla, and Square leading the pack.
While several members of the crypto community have raised the “institutional adoption” flag and cheered the inflow of big money, Ruffer’s actions are a pointer to what could happen in the future. For one, these companies are in for the money, and it begs to question what could happen if firms like MicroStrategy and Tesla decide to liquidate their Bitcoin positions.