- Asset manager Ruffer has disclosed that it completely exited its Bitcoin position in April, making a profit of over $1 billion in 5 months.
- Following this success, a company executive has revealed that it might look to get into the market in the future.
British investment firm Ruffer last November bought Bitcoin worth roughly $600 million. This was before the asset went on a positive run that saw prices more than triple from the 2017 high of $20,000. According to a report, the company was able to sell and completely exit the market in mid-April when prices were at an all-time high of $64,000. By doing so, the company has revealed that it was able to make a little over $1.1 billion profit. Prior to the sale, Ruffer was one of the largest public companies holding Bitcoin.
Investment director at Ruffer, Hamish Baillie, stated in an interview:
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,
The company further confirmed that its exit was motivated by the lifting of lockdowns. According to Ruffer, young people triggered the recent phenomenal bull run but will no longer stay at home trading cryptocurrencies once the lockdowns ease up. Despite this, Baillie disclosed that the company could come back to Bitcoin in the future.
“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,” he explained.
Asset managers change of view on Bitcoin
Like most companies, the London based asset management firm only recently changed its stance on Bitcoin. In 2017, the firm was sceptical of the digital asset. However, in 2020, the firm viewed the asset as an alternative safe haven for institutional investors. After making over $1 billion so fast and effortlessly for its clients, this could easily catch on and see more asset managers allocate a percentage of their portfolio to Bitcoin and other cryptocurrencies that hold promise in the near future.
Asset managers holding Bitcoin have found it not only great leverage to inflation but also profitable as its value increases over time.
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At the end of Q1, Tesla revealed that it had made a roughly $100 million profit in its sale of Bitcoin. At the time, the CEO, Elon Musk revealed that the sale was aimed at testing its liquidity. While the community was sceptical, Musk confirmed that Bitcoin had proven to be liquid, further bolstering its position as a cash alternative. Tesla still holds $1.5 billion in its balance sheet but with Elon Musk recently changing his views on Bitcoin, the community awaits an inevitable dump.
Baillie confirmed that Ruffer was not swayed by Tesla’s recent environmental concern noting that it was driven by “hyperbole and misinformation.”