Dogecoin Craze forces UK fund managers to surrender $ 1.1 billion bitcoin reserve

UK fund manager Ruffer liquidated its $ 600 million bitcoin (BTC) bet after getting nervous about the speculative frenzy in the cryptocurrency market., including large concentrations of meme-based tokens such as Dogecoin (DOGE).

The fund, which manages approximately $ 34 billion for high net worth clients and charities, started selling its cryptocurrency supply in December 2020when the BTC / USD pair rose to $ 25,000, the Sunday Times reported.

It continued to sell as the pair hit new highs, surpassing the $ 40,000 mark in January 2021.. Ruffer had canceled its remaining Bitcoin position in April, generating a $ 1.1 billion gain on the sale or an 83% return for the fund.

FUD on Dogecoin

Dogecoin Craze forces UK fund managers to surrender $ 1.1 billion bitcoin reserve
Dogecoin Craze forces UK fund managers to surrender $ 1.1 billion bitcoin reserve

Ruffer’s sequential Bitcoin declines came as analysts predicted higher valuations for the big cryptocurrency. For example, JPMorgan said in a report released in January that the BTC / USD pair could soar to $ 146,000 as it competes with gold to become the world’s leading inflation hedge.

The Chief Investment Officer of Guggenheim Partners, Scott Minerd also predicted a bitcoin between $ 400,000 and $ 600,000 and believed the cryptocurrency could catch the gold market in the long run.

Ruffer made it clear that he would consider buying back Bitcoin as inflation insurance, and its chief investment officer, Duncan MacInnes, told the Financial Times that he would assess the markets “from the barrier than from the trenches”.

But right now, MacInnes agreed, Bitcoin is too hot to hold, especially when Dogecoin, a meme-based cryptocurrency, is valued at $ 40 billion.. He said:

“It’s hard to say the foam came out”

Dogecoin, a satirical homage to Bitcoin, saw a strong bullish rally in 2021because at one point this year it’s up 15.337%.

Supportive tweets from Tesla CEO Elon Musk turned out to be some of the main catalysts behind the Dogecoin price rally., including the July 2020 shared meme showing that cryptocurrency is taking over the global financial system.

But the retail craze began to die out in May after Musk called Dogecoin a “scam” on an episode of Saturday Night Live.. The billion dollar businessman’s spin on tokens sparked panic sales in the cryptocurrency market, suggesting traders at a loss were trying to reap profits from still profitable cryptocurrencies like Bitcoin.

Dogecoin fell 30% immediately after Musk testified. On Wednesday, the cryptocurrency was trading more than 50% below its all-time high of $ 0.76.

Dogecoin’s classic head-and-shoulders pattern suggests massive declines. Source: TradingView

“You could see very clearly that speculative behavior has increased.”MacInnes said when he pointed to Bitcoin’s surge from $ 30,000 to nearly $ 65,000 amid the Dogecoin retail craze. However, He added that at least the benchmark cryptocurrency boom had some rationality.

Bitcoin “on the menu”

Lower yielding bonds and devalued fiat currencies left investors without a better traditional safe haven. As a result, their traditional 60/40 portfolio strategy didn’t yield anything leading them to “new uncorrelated assets and safe havens” like Bitcoin.

Bitcoin is struggling to restore the previous waves of support (green and orange). Source: TradingView

Ruffer has shifted its funds into anti-inflation investments that compete with Bitcoin, including gold, inflation-linked bonds and commodity stocks.. The company claimed it would keep cryptocurrencies “on the menu” for the future.

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