The chairman of a British investment firm says Bitcoin (BTC) is an apparently “meaningless” asset – but it still makes sense after the currency price movement proved profitable even during the recession. His company, Ruffer Investment, converted a portion of its gold holdings into Bitcoin in November.
Ruffer Investment Company Limited reallocated 2.5% of its gold Bitcoin Multi-Strategies Fund in November as a hedge against the “continued devaluation” of the fiat currency. Since then, the value of gold has risen by 4%, while the value of Bitcoin has grown 92% – a number that rose briefly to 123% during BTC’s short stay above $ 40,000 on January 10.
Writing in a investment analysis for the last quarter of 2020, Ruffer President Jonathan Ruffer said that, after much internal deliberation, his company had added exposure to Bitcoin because it thought BTC could challenge gold’s status as a “store of value”. He wrote:
“Our underlying reasoning is that bitcoin is becoming a challenge for gold’s position as the only store of value, the only thing to own when fiat currencies go bad.”
Ruffer said that Bitcoin was a “unique beast” that was subjected to a “long” assessment before being presented to the diversified fund:
“We work hard to assess the danger that bitcoin is a wrong choice. We have long watched it and thought it was a unique beast as an emerging store of value, combining some of the benefits of technology and gold. “
The Ruffer company had £ 20.3 billion ($ 27.5 billion) in assets under management as of November 30. The company was founded in 1994 and employs 330 people, serving approximately 6,600 customers among pension funds, families, charities and individuals worldwide.
Jonathan Ruffer told readers on the company’s website that, although Bitcoin looked like a “meaningless” asset, it was one that aligned with the company’s perspective on the world:
“Yes, it is an apparently meaningless asset – but it makes perfect sense for the way we see the world.”
Despite Bitcoin’s rise to new historical highs during the recession, Ruffer said he felt only “nervously satisfied” with the outcome, and that keeping customers safe was more important than big short-term highs.