Cryptocurrency bitcoin has moved above $20,000 for the first time, extending a massive recovery from the coronavirus sell-off earlier in 2020. At its lows in March it traded below $5,000.
The move coincides with news that fund group Ruffer allocated upwards of 2.5% of its assets under management (or £550 million) to bitcoin in November.
That news may have fueled investor speculation that bitcoin has entered a new era whereby more multi-asset institutional investors will start adding the cryptocurrency to diversify portfolios.
Ruffer confirmed its investment in bitcoin was a defensive strategy and was accompanied by reduced allocation to the more traditional safe haven of gold.
Commenting on the move in the context of the asset manager’s investment trust Ruffer Investment Company (RICA), Numis said: ‘The exposure for Ruffer fits with their outlook that that the level of government debt and recent fiscal and monetary stimulus can only be addressed through financial repression and that it has created the risk of debasement of traditional currencies.
‘We note that it remains at relatively modest positions at 2.5% of the portfolio and can understand the rationale of the managers seeking diversification at a time when the correlation of returns across asset classes is increasing.’
Bitcoin first reached $10,000 in December 2017, briefly recapturing that level in summer 2019 before its latest stunning run.
