Guggenheim Partners LLC is the latest one to join the institutional investors bullish on Bitcoin and bet on it.
The company is reserving the right for one of its funds to invest in Grayscale Bitcoin Trust, which is solely invested in Bitcoin and tracks the leading digital asset prices less 2% fees.
GBTC is currently trading around a 17% premium to BTC price, trading around $19,500. The filing said,
“Except for its investment in GBTC, the Fund will not invest, directly or indirectly, in cryptocurrencies.”
The $5.3 billion Macro Opportunities Fund of Guggenheim, which aims for total return through fixed income and other debt and equity securities, is planning to invest nearly $500 million in Bitcoin, which will be around 27,700 BTC — 0.15% of the total minted supply of the digital asset. According to the company’s filing with US Securities and Exchange Commission (SEC) on Friday,
“The Guggenheim Macro Opportunities Fund may seek investment exposure to Bitcoin indirectly through investing up to 10% of its net asset value in Grayscale Bitcoin Trust.”
With this investment, Guggenheim and its chief investment officer Scott Minerd will join the likes of legendary investors like Paul Tudor Jones and Stan Druckenmiller. They have put their money into the flagship cryptocurrency. A crypto analyst noted,
“Expect a lot of fund managers to follow in PTJ and Druckenmiller’s footsteps in disclosing BTC positions into year-end window-dressing season. Career risk of owning BTC has now turned into risk of not owning BTC.”
In the filing, the company described cryptocurrencies as “digital assets designed to act as a medium of exchange.”
It also listed a wide variety of risks, including “highly volatile” prices, trading on “largely unregulated” exchanges that may be exposed to fraud and failure, a crisis of confidence in the most extensive network, and user preference to shift to competing cryptos.
The largest cryptocurrency has been enjoying a strong rally in 2020, surging to its highest level of $19,500 since the peak of the 2017 bull run. Trading around $18,750, BTC is just 8% away from its ATH, while up 160% YTD.