UK fund manager Ruffer: we are in the “foothills” of institutional adoption of bitcoin

Ruffer Investment Company, the British fund manager which recently revealed it had bet £550m on bitcoin, has published more details about the headline-grabbing move.

In a review covering the six months to December 31, 2020, Ruffer said it has a history of using “unconventional protections” and that it views bitcoin in that same vein during a prolonged period of low interest rates.

“We think we are relatively early to this, at the foothills of a long trend of institutional adoption and financialisation of bitcoin,” the company added.

The Guernsey-based Ruffer disclosed its bitcoin exposure in a regulatory filing on December 15. At the time, the company told The Block that the exposure was worth around £550m, equivalent to roughly 2.7% of the firm’s assets under management.

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The latest filing states that the position is held through the Ruffer Multi Strategies Fund as well as through equity holdings in Microstrategy and Galaxy Digital. The former is a business intelligence firm that bought more than $1bn in bitcoin in 2020, the latter a well-known capital markets business specialising in digital assets. Both are publicly listed. Ruffer’s filing shows it has a £1.14m position in Microstrategy and a £2.17m stake in Galaxy.

The company describes bitcoin’s “bad reputation” as a risk premium.

“As we move through the process of normalisation, regulation, and institutionalisation, the compression of this premium can have a dramatic effect on the price. If we are wrong, bitcoin will return to the shadows and we will lose money - this explains why we have kept the position size small but meaningful,” it added.

About Author

Ryan Weeks is deals editor at the The Block, focused on fundraising, M&A and institutional trends in the crypto space, among other things. He is particularly interested in investigative work — so please send tips! Ryan previously worked at Financial News, Dow Jones as a fintech correspondent in London. Prior to that, he wrote for several different publications, including Sifted, AltFi and Wired. Beyond journalism, Ryan is a keen reader and w