Why most fund managers ignore crypto despite its bumper returns

Bitcoin has become a catch-all term for all things cryptocurrency, an asset which has captured investors' attention for the best part of two decades. Yet it's an investment which has largely been shunned by professionals in the fund manager space.

Launched in 2009 by the anonymous creator Satoshi Nakamoto as a rebellion to the traditional banking and financial services systems which contributed to the 2007/8 financial crisis; Bitcoin is now one of the most controversial assets of the modern investment era. Its very definition, use and investment case is widely debated between fans and critics.

Research by AJ Bell into which assets generated the best returns varied between the 2010s and the 2020s, found that Bitcoin had bested every asset on a capital returns basis, making almost 90,500% in the 2010s and just over 730% between 2020 and late February this year.

This was ahead of growth equities – which encompasses the big US technology firms – gold and US treasuries. Why then, given the sizeable returns, do fund managers steer clear?

Three reasons fund managers shun Bitcoin  

1. They cannot truly value it

Joe Bauernfreund, CEO and chief investment officer of Asset Value Investors and portfolio manager of the AVI Global Trust, Dan Brocklebank, UK head of Orbis Investments and Paul Niven, manager of the F&C trust, all say that they don’t own Bitcoin because you cannot value it.

“If you can’t value something, you’re not investing, you’re speculating,” says Orbis’ Brocklebank.

According to Coinshare – one of the main crypto trading platforms – one Bitcoin today is worth over £53,000.

“Price isn’t proof; it’s just popularity in numerical form. In markets, rising prices create their own narrative, but that doesn’t make them true. Bitcoin may be many things, but a cashflow-generating asset isn’t one of them,” says Brockelbank.

2. It’s seen as high risk and volatile

Brocklebank says that the ‘FOMO, or the Fear of Missing Out’ element to Bitcoin was a key driver behind why people get involved and agreed that this was an “incredibly powerful factor, but it’s not an investment strategy”.

“The discomfort of missing out has probably cost investors more than most bear markets,” he says.

Indeed, while Bitcoin’s share price is up 17,000% since it launched it has been an incredibly volatile journey. Today’s price is down 40% in just five months from its peak back in October 2025.

Our own calculations show Bitcoin had dropped from being the lead generator of returns in the 2010s and early 2020s to offering the worst capital returns over the last 12 months as of late February 2026.

At the start of 2026 widespread reports found that over half the supply of Bitcoins were now ‘underwater’, meaning that the average entry price is higher than the current market price, in other words, the owners are sitting on unrealised losses.

The latest fall came during a period when gold was rallying to its own all-time high, an asset Bitcoin has been sometimes compared to as a store of value and a way of achieving diversification from a standard portfolio made up of equities and bonds.

F&C’s Niven says that long term holders of Bitcoin have simply become accustomed to the extreme volatility in the price, but for investors seeking stable, long-term outcomes it’s not a suitable choice.

“Until recently, Bitcoin had behaved somewhat like a leveraged, digital version of gold but this relationship has changed,” Niven says.

“Bitcoin fell by over 50% from recent highs while gold has continued to trade towards all-time highs. The case for bitcoin being a diversifying asset has, therefore, diminished and there are additional concerns over the longer-term impact of quantum computing on crypto assets."

One active manager which did make a £600 million investment in Bitcoin was Ruffer Investment Company back in 2020, with a 2.5% allocation.

Ruffer’s multi-asset approach has seen it take more unconventional investments, which is how they described this stake in Bitcoin at the time.

It netted a $1.1 billion profit after it sold out a year later and, at the time, explained that the rush of speculation in the market, evident in rallies for meme-based cryptocurrencies had made the asset too risky to hold.

Duncan MacInnes, the former investment director at Ruffer who helped manage its Bitcoin stake, said back then that “it just looked like this would be a time when it would be nicer to be watching from the sidelines than from in the trenches”.

3.  While well-known Bitcoin is still niche in traditional investment terms

On the surface, it might seem like Bitcoin is everywhere and indeed, more people have heard of it than they have an investment trust or fund, according to a Boring Money study.

But Bitcoin has operated – by design – outside of the mainstream and despite its public notoriety it’s still a fairly niche asset meaning it hasn’t been necessary, or often appropriate, for fund managers to own it.

Even though it’s now available for UK retail investors to buy passively after the regulator reversed its decision to ban the sale and marketing of crypto trackers, it’s still not fully in the mainstream. As ease of access grows, managers may feel compelled to explain why they will or won’t invest in it. For AVI’s CEO Bauernfreund, he says simply “we don’t invest in crypto, and I can’t see a situation where we would”.