The inclusion of Bitcoin (BTC) in its investment portfolio by a British investment management company underscores the transformation of institutions to digital assets.
Ruffer Investment Company Limited is an investment management company listed on the London Stock Exchange. The company announced its new Bitcoin allocation strategy.
Ruffer said in his performance report and managers’ evaluations released on Tuesday that the company has included Bitcoin in its Multi-Strategies fund, mainly as a defensive measure against the risk of “continuing devaluation” of legal tender. Bitcoin assets currently held by the fund account for approximately 2.5% of total assets.
In November last year, Ruffer made this asset allocation after reducing his gold holdings and switching to BTC.
The company stated:
“We believe this is a small but effective insurance policy against the continued depreciation of major global currencies. Bitcoin diversifies the company’s investment in gold and inflation bonds, and can hedge some of the currency and market risks we see.”
Ruffer was founded in 1994 and, as of November 30, managed 20.3 billion euros (27.2 billion US dollars) in assets. The company has approximately 6,600 customers worldwide, including individuals, families, pension funds and charities.
Ruffer’s move echoes JPMorgan Chase’s recent statement that Bitcoin is quietly eating into gold’s market share. In a report to clients released by JPMorgan Chase last week, quantitative strategists such as Nikolaos Panigirtzoglou stated that the adoption of Bitcoin may bring “structural resistance” to gold.
These strategists wrote:
“If this medium and long-term theory is proven correct, the price of gold will encounter structural resistance in the next few years.”
For Bitcoin, 2020 is a year of change. Companies such as Grayscale, PayPal, MicroStrategy, and MassMutual have changed people’s views on digital assets.
Erik Voorhees, a pioneer in cryptocurrency and CEO of ShapeShift, believes that strong institutional investors will protect assets such as Bitcoin from excessive government intervention. With the participation of major institutions, the Bitcoin market is forming a natural “fortress” to resist intrusive regulation.
