Ruffer Investments just announced a $744 million buy of cryptocurrency Bitcoin.
After almost two months of flirting with previous all-time high and meeting strong selling pressure around the $19,400 mark, Bitcoin surged passed the $20K milestone for the first time in the early hours of the morning. From there, it charged upward of $21,400 setting a new watermark for its all-time high.
Meanwhile, Ruffer Investments announced that back in November, they had moved approximately 2.5% of their $27 billion portfolio into Bitcoin, and investment that’s now worth around $765 million.
Little pond, big fish
This announcement comes in the wake of a string of institutional investors making large-scale purchases in the once stigmatized cryptocurrency including:
Square announced a $50 million investment in October 2020.
Twitter founder and CEO of Square Jack Dorsey moving 1% of his total portfolio into bitcoin.
MicroStrategy announced a $400 million investment into bitcoin in early December – before upping that number to $650 million just a few week later. Several big banks downgraded MicroStrategy’s stock in an analysis that will likely age about as well as Steve Ballmer’s 2007 prediction that “There is no chance of the iPhone ever gaining significant market share.”
MassMutual announced a $100 million investment.
Just this morning, Alan Howard announced he planned to take his cryptocurrency holdings to $1 billion
Build and they will come
There’s more writing on the wall.
As Bitcoin’s profile grows, so too does the infrastructure to support its wide-scale use.
PayPal and Square have both released Bitcoin as a currency in their payment apps, starting to chip away at one of Bitcoin’s biggest challenges: day-to-day utility. Currently, the cold cryptowallets have a bit of a learning curve.
It bodes well that Bitcoin is the darling of big tech, the heavyweight champions of trend-setting and trail blazing. They are by many measures the trailblazers who create value while others are on lifelines or parasitic in nature.
Big tech coupled with big money – as Ruffer Investment is starting to kick off – gives Bitcoin a strong foundation. That foundation was the missing piece and entire risk profile for early adopters who jumped.
Charging interest
Can we quantify this growth in interest?
One of the gathering places for Bitcoin’s earliest adopters was Reddit’s /r/Bitcoin forum.
The growth rate in this community over the last few months has been astonishing. Consider these screenshots, all taken over the last week.
Ruffer Investments will be the first of many taking an interest in Bitcoin
Another harbinger for Bitcoin’s inevitability is the growing interest among Millennial and Gen Z investors who will inherit the society and systems in place in the next 10–20 years.
Despite fulfilling a life trajectory similar to their parents, they are buried in debt and unable to buy or invest.
They are inheriting a decayed system that already showed signs of major failures over 10 years ago in the form of the Great Financial Crisis. The solution to that was a capital injection into the same failing system. It kicked the proverbial can down the road, to put it modestly.
They will pay their own way for everything: education, health care, retirement. Social Security is not expected to maintain current levels of payout by the time they arrive. That means the lion’s share of their tax revenue will be paying on the debt generated by their predecessors.
While they work off their indentured servitude, their debt to society grows. Next year will be the first year the U.S.’s debt surpassed its GDP since World War II.
In light of this reality, it’s easy to understand why Millennials, Gen Z, and their posterity will be eager to adopt a new system that gives them a fresh start.
It’s their hail Mary chance at the American Dream.
Ruffer Investments is forward facing and an early mover that may just clear the way for other institutional investors.