Cryptocurrency News

Dogecoin frenzy forces UK fund manager to unload $1.1 billion bitcoin stash

United Kingdom-based fund manager Ruffer liquidated his $600M bitcoin bet after panic grew about the speculative frenzy in the cryptocurrency market, including huge rallies in meme-based tokens like Dogecoin.Doge)

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

In January 2021 the pair set new highs breaking the level of $40,000, it continued selling. Raffer liquidated his remaining bitcoin positions as of April, netting $1.1 billion in profit from the sale, or an 83% return for the fund.

Dogecoin FUD

Raffer’s gradual bitcoin dump came at a time when analysts were predicting higher valuations for the major cryptocurrency. For example, JP Morgan said in a report published in January That BTC/USD could rise to $146,000 as it competes with gold to become the world’s leading inflationary hedge.

Scott Minrad, chief investment officer of Guggenheim Partners Called One $400,000-$600,000 for bitcoin, believing that the cryptocurrency will be able to mousetrap the gold market in the long run.

Raffer clarified that he, along with his investment director Duncan McInnes, would consider repurchasing bitcoin as insurance against inflation. say The Financial Times said they would assess the markets “from the edge rather than the trenches”.

But for now, McInnes agreed, bitcoin is too hot to hold, especially when Dogecoin, a joke-based cryptocurrency, is valued at $40 billion. He said:

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

Dogecoin, a satirical tribute to bitcoin, saw a wild upside rally in 2021, as it at one point gained 15,337% year-on-year.

Supportive Tweets Tesla CEO Elon Musk emerged as some of the major catalysts behind the Dogecoin price rally, including re-sharing a July 2020 meme showing the cryptocurrency taking the global financial system by storm.

But in May when Musk sold Dogecoin “hustle“On a Saturday Night Live episode. The billionaire entrepreneur’s U-turn on the token led to a panic sell-off in the cryptocurrency market, indicating that loss-making traders are attempting to capitalize on profits from still-profitable cryptocurrencies like bitcoin.

Dogecoin fell 30% shortly after Musk’s statement. As of June 9, the cryptocurrency was trading lower by more than 50% from its all-time high of $0.76.

Dogecoin’s classic head and shoulders pattern signals a further downside. Source: TradingView

“You can see very clearly that there was an increase in speculative behavior,” McInnes said, pointing to bitcoin’s rise from $30,000 to nearly $65,000 amid the Dogecoin retail frenzy. Still, he said that at least there was some rationale behind the benchmark cryptocurrency’s boom.

bitcoin “on the menu”

Low-yield bonds and devalued fiat currencies left investors without a better traditional safe-haven asset. As a result, his traditional 60/40 portfolio strategy returned nothing, giving him a “new safe-haven, uncorrelated asset” like bitcoin.

Bitcoin struggles to reclaim previous support waves (green and orange). Source: TradingView

Raffer has moved its funds to bitcoin-rivaling anti-inflation assets, with gold, inflation-protected bonds and commodity stocks. The firm insisted that it would keep the cryptocurrency “on the menu” for the foreseeable future.