According to the official announcement, the recent exposure to Bitcoin is a move to diversify the company’s portfolio in order to reduce dependence on gold. The company plans to take advantage of the recent boom in BTC price.
Founded in 1994, the investment management firm has major exposure to global equities. The company has over $20 billion in assets under management with approximately 6,600 clients around the world. Ruffer expressed concerns regarding the recent devaluation of global currencies including the US Dollar.
“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,” the company said in an official statement on Tuesday.
- Bitcoin Inflow
In recent months, several investment management companies in Wall Street announced exposure in Bitcoin and other cryptocurrencies. While Bitcoin is gaining traction, Gold has seen significant outflows in the last few months.
During the last 4 weeks, gold saw $9 billion in outflows compared to nearly $1.4 billion inflows in Bitcoin-related funds. CoinShares published a report earlier this month and indicated that the total crypto assets under management reached an all-time high of $15 billion in 2020, compared to just $2.57 billion in 2019.
Grayscale, a leading crypto asset management firm has reported record investments in Bitcoin-focused investment products. It seems like a majority of the gold outflows are going into the crypto market and the world’s largest cryptocurrency is benefitting the most.