Firm Reveals Whether Its $745M Bet on Bitcoin Paid Off

Ruffer Investments’ extravagant Bitcoin bet appears to be paying off.

In an update to the London Stock Exchange, the company revealed that the $745 million in BTC it purchased in November has already surged by 90%.

And the good news doesn’t end here. It also snapped up stock in MicroStrategy and Galaxy Digital, and both stocks have risen by 100%.

Explaining its rationale, Ruffer Investments said:

“Our rationale has been well publicized but briefly, we have a history of using unconventional protections in our portfolio. This is another example, a small allocation to an idiosyncratic asset class which we think brings something significantly different to the portfolio.”

It's worth noting that Ruffer is a little more clear-eyed on its investments than other institutions that have thrown themselves into this space. The update added:

“Think of 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.”

Ruffer also offered its investment outlook for the coming year. Although the company predicted that COVID-19 will be conquered by the vaccine in 2021, its analysts believe that central banks are going to keep printing money without limits — and government spending isn’t going to slow down any time soon.

“Given the unique blow to the economy and the co-ordinated shock-and-awe global response, it seems fair to conclude that the distribution of possible outcomes from here is wider than it has ever been. This makes a genuinely all-weather portfolio even more important,” Ruffer added.

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