Ruffer Turns Bitcoin Investment into $750M Profit in Under 2 Months

U.K.-based Ruffer Investment Management has managed to quickly turn its recent bitcoin investment into a $750 million profit.

Having bought in November, Ruffer’s investment managers took profits in December and January as the cryptocurrency more than doubled to around $40,000, according to a Telegraph Money report Tuesday.

“We’ve been surprised by how well it has done and how quickly. We did not expect immediate fireworks,” Duncan MacInnes, co-manager of Ruffer Investment told the newspaper.

MacInnes said the 2.5% allocation was made across all Ruffer’s funds, costing around $600 million.

As prices soared, the firm opted to take out its original investment and make $650 million in profit. “We still have around $700 million left in and are currently up by $750 million overall,” said MacInnes.

The investor said Ruffer has been following bitcoin for a few years and was previously skeptical of the cryptocurrency. That’s all changed now, however, MacInnes said: “The economic environment for bitcoin right now could not be better.”



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Ruffer Investment Used Coinbase to Execute $745M Bitcoin Buy

When Ruffer Investment wanted bitcoin in November it turned to One River Digital who went to Coinbase to hit the “buy” button on a purchase now worth over $745 million, Ruffer representative Jonathan Atkins confirmed to CoinDesk.

In a recent portfolio update, Ruffer alluded to the involvement of the “world’s largest custodian of digital assets” without naming names. “Access to the bitcoin is controlled by multi-layer security protocols,” Ruffer wrote of its cold-storage setup. A second source confirmed to CoinDesk that Coinbase was the custodian described in Ruffer’s portfolio update. Coinbase Custody announced last month it was storing over $20 billion in customer assets.

The revelation sheds light on how large investors are entering the bitcoin market: namely through trusted partners. Big bets in recent weeks by everyone from MassMutual to Guggenheim are seen as the driving force behind bitcoin’s current price rally.

As CoinDesk reported Tuesday, Ruffer invested 2.5% of its $27 billion portfolio into bitcoin in November. The following day, One River Digital, a crypto-focused offshoot of volatility hedge fund One River Asset Management, came out of stealth proclaiming it had already brokered $600 in bitcoin and ether for its institutional clients.

Coinbase confirmed on Wednesday that it was conducting trade execution and crypto custody for One River Digital. It declined to comment for this story.

Ruffer owns a stake in One River Digital. Billionaire hedge fund manager Alan Howard does as well. One River Digital did not respond to a request for comment.

The Ruffer revelation shows just how far San Francisco’s Coinbase is reaching into the world of corporate finance.

Earlier this month, it revealed itself as the “primary execution partner” for MicroStrategy’s $425 million bitcoin purchase in the fall. That blog post explained how Coinbase pulls off market-swamping allocations without alerting traders.

Meanwhile, Ruffer explained in its portfolio update that macroeconomic factors guided the manager’s bitcoin bet.

“The current macroeconomic environment is set up perfectly for an asset that blends the benefits of technology and gold,” Ruffer said, adding:

“Negative interest rates, extreme monetary policy, ballooning public debt, dissatisfaction with governments – all provide powerful tailwinds for bitcoin at a time when conventional safe-haven assets, particularly government bonds, are perilously expensive.”

Ruffer said bitcoin has grown to meet this moment. 

“Since 2017, billions of dollars have been invested in the infrastructure needed to support this wave of bitcoin adoption; many of the impediments to institutional investors have been dismantled.”

Ruffer’s analysis was clear: the institutions are here with more on the way; the cypherpunks are fading fast. Wrote the $27 billion mega-manager:

“[Bitcoin] seems set to move from being loved by the anti-establishment to being embraced by the dominant interests of the establishment.”

Zack Seward contributed reporting.



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