Dogecoin mania forces UK fund managers to sell $1.1 billion in Bitcoin reserves

Ruffer, a UK-based fund manager, liquidated its $600 million worth of Bitcoin (Bitcoin) Betting after being nervous about the speculative frenzy in the cryptocurrency market, including the sharp rise of meme-based tokens (such as Dogecoin) (dog).

According to the Sunday Times, the fund manages approximately US$34 billion in assets for wealthy clients and charities, and began selling its cryptocurrency reserves in December 2020, when the BTC/USD exchange rate rose to US$25,000. Report.

As the currency pair hit a new high in January 2021, breaking the $40,000 level, it continued to sell. By April, Ruffer had closed its remaining Bitcoin position and made a net profit of $1.1 billion from the sale, or the fund’s return rate was 83%.

Dogecoin FUD

Ruffer continues to sell bitcoin at a moment when analysts predict that the value of the flagship cryptocurrency will be higher.For example, JPMorgan Chase In a report published in January, BTC/USD may rise to US$146,000 as it competes with gold to become the world’s leading inflation hedging tool.

Scott Minerd, Chief Investment Officer of Guggenheim Partners, also call For Bitcoins of US$400,000 to US$600,000, I believe that this type of cryptocurrency can restrain the gold market in the long run.

Ruffer clarified that it will consider repurchasing bitcoin as insurance against inflation. Its investment director Duncan MacInnes tell The British “Financial Times” stated that it will assess the market “from the sidelines rather than in the trenches.”

But for now, MacInnes agrees that Bitcoin is too hot, especially when Dogecoin, a joke-based cryptocurrency, is worth $40 billion. He says:

“It’s hard to say the bubble has come out.”

Dogecoin is an ironic tribute to Bitcoin. It experienced a crazy rise in 2021, and it has risen by 15,337% at some point so far this year.

Supportive tweets Tesla CEO Elon Musk became some of the main catalysts behind the increase in Dogecoin’s price, including a meme forwarded in July 2020, showing that cryptocurrency is sweeping the global financial system.

But in Musk called Dogecoin “Hustle and bustle“At Saturday night live episode. The billionaire entrepreneur’s U-turn of the token triggered a panic sell-off in the entire cryptocurrency market, suggesting that loss-making traders are trying to cash in profits from still profitable cryptocurrencies such as Bitcoin.

After Musk’s statement, Dogecoin immediately fell by 30%. As of Wednesday, the cryptocurrency’s trading price was more than 50% lower than its historical high of $0.76.

Dogecoin’s classic head and shoulders pattern indicates that there will be a sharp decline in the future. Source: TradingView

“You can very clearly see the increase in speculation,” MacInnes said, while noting that Bitcoin has risen from $30,000 to nearly $65,000 during the Dogecoin retail frenzy. Nonetheless, he added that at least there is some rationality behind the boom of the benchmark cryptocurrency.

Bitcoin “on the menu”

Lower-yielding bonds and depreciated fiat currencies leave investors without better traditional safe-haven assets. As a result, their traditional 60/40 portfolio strategy yielded nothing, which led them to turn to “new safe-haven, unrelated assets” such as Bitcoin.

Bitcoin struggled to recoup the previous wave of support (green and orange). Source: TradingView

Ruffer has transferred his funds to anti-inflation assets comparable to Bitcoin, Including gold, Inflation-protected bonds and commodity stocks. The company claims that it will keep cryptocurrency “on the menu” in the future.