Bitcoin has been exploding over the past year. Aside from experiencing heavy price booms that saw the currency rise from about $10,000 to $40,000 in just three months and attain all kinds of new highs, the currency has also been seeing fresh waves of institutional interest from the likes of companies such as MicroStrategy and Tesla, which have both purchased billions of dollars-worth of the asset. Now, asset manager Ruffer claims that things are just getting started for the world’s number one digital coin by market cap, and adoption is going to increase tenfold throughout the year.
Ruffer: Bitcoin Hasn’t Come Close to Peaking
Bitcoin has been experiencing loads of new respect and support over the past several months, though according to Ruffer, we’re nowhere near the peak yet. The company is adamant that adoption for the currency is still low, and that we’re only in the early stages. In a statement, the company looks at how the asset has exploded by nearly 500 percent in a rather short period:
We think we are relatively early to this, at the foothills of a long trend of institutional adoption and financialization of bitcoin. Think of bitcoin’s bad reputation as a risk premium. As we move through the process of normalization, regulation and institutionalization, the compression of this premium can have a dramatic effect on the price.
At the time of writing, Ruffer manages nearly $4 billion in assets, of which three percent are based in bitcoin and cryptocurrency. The company itself invested in the digital asset late last year, marking another turn for institutional support in the cryptocurrency arena. The company has commented that its investments have more than doubled in the last three months alone.
The company was initially attracted to BTC largely because it felt it added something unique to its portfolio and would ultimately help to diversify things a bit. Ruffer mentions:
Due to zero interest rates, the investment world is desperate for new ‘safe havens’ and uncorrelated assets.
At the same time, the company acknowledges that bitcoin and other forms of crypto are consistently straddled by volatility and price fluctuations, and that anything could happen overnight. That’s why the company’s present bitcoin assets will not go more than the three percent it invested in last November. Right now, it’s simply watching and waiting to see what BTC does next.
Trying to Stay Safe
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.
At press time, many regulators and officials are expressing similar sentiment that traders need to be wary when it comes to bitcoin including Janet Yellen – the new Treasury Secretary – and Gary Gensler, the current nominee for chair of the Securities and Exchange Commission (SEC).