British investment management firm, Ruffer Investment has announced that it has added Bitcoin as the latest asset. The company stated that its $740 million Bitcoin investment is a move aimed at reducing its exposure to gold.
Ruffer Investment Confirms Exposure to Bitcoin
Last month Ruffer Investment announced its plan to allocate a portion of its assets in management to Bitcoin in an attempt to reduce its exposure to gold.
The investment firm which was founded in 1994, has major exposure to global equities which now includes Bitcoin. The firm currently manages assets worth approximately $27 billion with over 6,500 clients around the world.
In a memo sent to its shareholders on Tuesday, 15th December 2020, Ruffer Investment confirmed its exposure to Bitcoin. The company announced that approximately 2.5% of its total assets under management or $740 million (£550 million) has been moved to bitcoin investment. Ruffer Investment announced:
Our exposure to bitcoin is currently equivalent to around 2.5% of the portfolio. We see this as a small but potent insurance policy against the continuing devaluation of the world’s major currencies. Bitcoin diversifies the company's (much larger) investments in gold and inflation-linked bonds, and acts as a hedge to some of the monetary and market risks that we see
Bitcoin Over Gold?
In recent months, cryptocurrencies have seen the highest interest it has received from investment management companies. With mega-firms announcing exposure to Bitcoin and other cryptocurrencies just days apart, Gold seems to be the most affected store of value. Statistics of the last 4 weeks shows that a total of $9 billion has been moved out of gold, while Bitcoin registered nearly $1.4 billion in inflows.
A December report published by CoinShares reveals that the total cryptocurrencies in assets reached an all-time high at the end of November. The total crypto assets under management in 2020 sits at $15 billion, compared to just $2.57 billion in 2019.
An unrelated report from cryptocurrency management firm Grayscale confirms the rising institutional investments in cryptocurrencies. Grayscale reported its highest ever investments in Bitcoin-focused products in 2020. With institutional investors cashing out their gold holdings, it seems like the majority of the outflow is sent into the crypto market.