A top-performing hedge fund is on the bitcoin trade even though its portfolio manager is not a long-term believer.

Leon Warburton of $20 million Perth-based Warburton Global Macro Fund says the firm has made a tidy profit trading the spread between bitcoin prices in North America and Europe and Asia.

Over a six-week period the fund was buying bitcoin in Europe and the US and then selling it in Asian markets where demand, and therefore pricing, was higher.

Fools Gold

«We got onto bitcoin quite early before the institutional guys got there and were able to pick up a spread between the different exchanges,» Warburton told The Australian Financial Review, (behind paywall).

About 25 million people own Bitcoin but Warburton believes the majority are hoarders that treat their holdings as a store of value rather than actively trading it.

Bitcoin is too volatile to trade, the portfolio manager says, but «if you are going to take a fundamental view on the crypto-currency it would be whether it's going to cannibalise the gold market.»