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Rothschild Triples BTC Exposure

GB Market Commentary 21/07/2021

by Alex Clark

After a brutal sell-off yesterday, which saw bitcoin plummet to a low of $29,393, the asset has consolidated above $30,000 and the market has turned green. Whilst the stochastic oscillator points to a continuation of this growth, the simple and exponential moving averages give a strong sell signal. Although this hasn’t stopped a collection of bitcoin whales from purchasing 28,377 BTC over the weekend (worth $841.85 million) after being inactive since December of 2018.

Altcoins have responded positively to Bitcoin’s growth with Rune (RUNE) up 25% in the past 24 hours, despite Friday’s attack which saw hackers drain 2,500 Ethereum (ETH) tokens from the platform’s liquidity pools. Other winners include Quant (QNT) up 20%, Polygon (MATIC) up 20%, Axie Infinity (AXS) up 18% and Compound (COMP) up 14%.

In its annual report to shareholders, released on Monday, Ruffer Investment revealed it made a total return of 19.5% in the year to 30 June 2021 – its highest since 2009 to 2010. The firm’s controversial purchase of bitcoin back in November is partly responsible, contributing over a quarter of the annual total return. Whilst Ruffer exited its position earlier this year, managers say, ‘Bitcoin may yet fulfil its potential’ and ‘the threat that led them to buy Bitcoin in the first place has not gone away’, which could mean a return to the asset in the future; given the recent sell-off this could be sooner than we expect.

According to a survey conducted by Fidelity, 70% of institutional investors have revealed that they expect to purchase digital assets sometime in the future, up from 35% last year, and over half of the participants said they have already invested in cryptocurrencies. Further research shows that 90% of investors plan to own crypto by 2026.

Among those already invested, is Rothschild Investment which has more than tripled its bitcoin exposure through Grayscale Bitcoin Trust (GBTC) over the past quarter, showing a “buy the dip” mentality during BTC’s recent price decline.

After reports by Visa that consumers spent more than $1 billion in cryptocurrency on goods and services during the first half of 2021 through their crypto-linked cards, Mastercard has ramped up its efforts to simplify the conversion from crypto to Fiat currency.

Research shows that China’s mining crackdown has drastically improved bitcoin’s environmental impact as miners have headed to the cheapest sources of energy on the planet, which more often than not are renewable, and a lot of older and more inefficient mining equipment has been taken offline.

Elon Musk, Jack Dorsey and Cathie Wood are due to speak at the B-Word event today, which aims to demystify and destigmatize mainstream narratives about Bitcoin, discuss regulation of the network, explain how institutions can embrace it, and raise awareness around areas of the network that need support. For those who are interested in joining, the event kicks off at 5pm today (UK time) and will be streamed online.


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