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.
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.