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© Reuters. FILE PHOTO: A representation of virtual currency Bitcoin

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By Sinead Cruise, Tom Wilson and Anna Irrera

LONDON (Reuters) – British fund manager Ruffer Investment Management has shifted around $675 million of its clients’ fortunes into bitcoin, an investor memo seen by Reuters showed, in one of the largest signals of rising institutional interest in the digital currency this year.

The firm, which manages 20.3 billion pounds ($27.3 billion) in assets on behalf of more than 6,500 investors globally, described the allocation as “a small but potent insurance policy against the continuing devaluation of the world’s major currencies”, the memo said.

The allocation represents around 2.5% of its total assets, the memo said. Ruffer referred Reuters requests for comment to its media relations agency, which did not immediately respond to enquiries.

has soared to a record high this year, up 170%, as investors see in the cryptocurrency a hedge against the risk of inflation as governments and central banks turn on the stimulus taps, and a digital payment method that promises to go mainstream.

On Wednesday it was up 1.8% at $19,780, just below from its all-time high of $19,918 hit this month.

The price surge makes bitcoin an attractive bet for investors willing to take riskier positions as they hunt for yield in a record-low interest rate environment.

“Bitcoin diversifies the company’s (much larger) investments in gold and inflation-linked bonds, and acts as a hedge to some of the monetary and markets risks we see,” Ruffer said in the memo.

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