UK Edition
City firm Ruffer Investment Management has made more than $750m (£540m) from its recent and controversial Bitcoin investment, cashing in on hundreds of millions in gains as the digital currency soared in value.
Telegraph Money can reveal managers took profits in December and January after its investment in the cryptocurrency more than doubled in a little over a month.
Speaking publicly for the first time since placing the Bitcoin bet in mid-November last year, Duncan MacInnes – who co-manages the Ruffer Investment Company, one of the only funds to make a profit during the financial crisis – said last week: “We’ve been surprised by how well it has done and how quickly. We did not expect immediate fireworks.
“The 2.5pc allocation we made in November across all our funds, which totalled around $600m. This has more than doubled so we decided to take out our ‘book cost’ and take $650m in profits. We still have around $700m left in and are currently up by $750m overall,” he said.
The numbers are now likely to be even higher, after Bitcoin’s price surged yet again over the weekend.
The value of the digital currency jumped up by as much as 20pc in a matter of hours, after the eccentric Tesla billionaire Elon Musk added “#Bitcoin” to his Twitter biography.
Wild price swings have been a hallmark of the cryptocoin, which soared to record highs at the start of the year, as the above chart shows.
Today its sterling price stands at around £25,000 a coin, double the price in the middle of November last year when Ruffer staked its bet.
The first Bitcoin craze came in 2017 when its price shot up to around £15,000 per coin from less than £1,000, but ended swiftly in 2018, with its value falling more than 80pc.
“We have been following Bitcoin’s rise for a few years. Back in 2017 we were very sceptical and I remember laughing in meetings at it all at the time. But in 2020 everything has changed – the economic environment for Bitcoin right now could not be better,” Mr MacInnes said.
“We are seeing negative interest rates and bond yields everywhere. We have seen the war on cash ramping up because of the pandemic. At the same time, everything is going digital – our lives are far more digital than a year ago.
"There are now proper regulated institutions buying in too. People are desperate for alternative safe haven assets and Bitcoin is like a digital gold.
“We are at the foothills of a long upward trend in its institutionalisation,” he added.