British investment management firm Ruffer LLP is the latest publicly-listed company to announce its exposure to Bitcoin (BTC).
With currency debasement on the agenda across many countries and the precious metals market tanking, several high-profile organizations are now holding Bitcoin as a treasury reserve asset.
Ruffer Reduces Gold Exposure With a $675 Million Bitcoin Bet
Ruffer announced the news via a letter to investors published on Dec. 15. According to the note, the company allocated 2.5% of its $620 million in assets under management (AUM). The firm’s investment subsidiary, Ruffer Investments Co. Ltd., handled the trade back in November.
Thus, the allocation amounts to about $15 million. The parent company Ruffer LLP holds over $27 billion in AUM.
Commenting on the rationale behind the purchase, the company revealed that it was a defensive move aimed at reducing its exposure to gold, adding:
“Bitcoin diversifies the company’s (much larger) investments in gold and inflation-linked bonds, and acts as a hedge to some of the monetary and market risks that we see.”
The Ruffer note also described the Bitcoin play as a “small but potent insurance policy” against currency debasement.
According to an asset allocation chart tweeted by economist and crypto analyst Alex Krüger, about 8.4% of its AUM is held in cash. The Pounds Sterling currency accounts for over 81% of this sum.
BTC Becoming a Darling Among Institutional Investors
Ruffer now joins a growing list of public companies holding bitcoin as part of their corporate assets. Business intelligence outfit MicroStrategy arguably kicked off the storm earlier in the year. The firm now owns almost 41,000 BTC worth over $795 million at the current market price.
Jack Dorsey-owned Square also followed suit, investing about $50 million in bitcoin in October. Like Ruffer, Square’s Bitcoin exposure also amounted to a small portion — about 1% — of its total assets.
At the current BTC price, the company is sitting on unrealized gains north of $40 million from the purchase.
Insurance firms and pension funds are also making a splash on the Bitcoin scene, further reinforcing BTC’s emergence as a bona fide investment vehicle.
As previously reported by BeInCrypto, Massachusetts Mutual Life Insurance Co. took up a $100 million position in bitcoin in early December.
According to JPMorgan, if insurance firms and pension funds allocate 1% of their holdings, about $600 billion in institutional flows could make their way into BTC.