By
Steve Muchoki
April 19th, 2024
In its filing with the US SEC, Guggenheim says that it wants to facilitate a 10% exposure from its $5 billion Macro Opportunities Fund, to Bitcoin. The investment, however, will happen through the Grayscale Bitcoin Trust and could be the biggest institutional investment after MicroStrategy.
The Chicago-based global investment giant Guggenheim Partners is looking for a massive investment in Bitcoin. The financial services giant is among the latest institutional players seeking exposure to Bitcoin.
As per its filing on November 27 with the US Securities and Exchange Commission (SEC), Guggenheim’s Macro Opportunities Fund is looking to invest in Bitcoin via the Grayscale Bitcoin Trust (GBTC). The GBTC is one of the world’s biggest Bitcoin investment fund holding over 500K Bitcoins with over $9 billion of assets under management.
As per the SEC filing, Guggenheim is looking to invest 10% of its $5 billion Macro Opportunities Fund into Bitcoin. Thus, $500 million worth of investment is likely to flood the Bitcoin market ahead. This will also be one of the biggest institutional money pumps in BTC after MicroStrategy’s $425 million. Moreover, the SEC filing states:
“The Macro Opportunities Fund may seek investment exposure to bitcoin indirectly through investing up to 10% of its net asset value in Grayscale Bitcoin Trust (‘GBTC’), a privately offered investment vehicle that invests in bitcoin. To the extent the Fund invests in GBTC, it will do so through a wholly-owned subsidiary, which is organized as a limited company under the laws of the Cayman Islands (the “Subsidiary”). Except for its investment in GBTC, the Fund will not invest, directly or indirectly, in cryptocurrencies.”
The filing also mentions other potential risks associated with cryptocurrency investment. This includes a lack of crypto exchange regulations as well as the lack of clarity about crypto tax rules. Furthermore, it also informs investors about GBTC’s “significant premium” to the net asset value. Thus, if GBTC fails to trade at a premium to its NAV, the fund investment value could fall.
Guggenheim Fund Interest in BTC amid Bitcoin Price Surge to Above $18,5000
Soon after the Guggenheim news broke out, the BTC price which was under pressure made quick advancements surging past $18,000 levels on Sunday. At press time, Bitcoin (BTC) is trading at a price of $18,517 with a market cap of $342 billion. After last Wednesday’s correction, the BTC price remained under significant pressure over the weekend.
Well, the news about more institutional money coming to Bitcoin has brought the bull sentiment back. It looks like even big financial players are building up their positions in Bitcoin. The crypto asset class has attracted many big players as a potential hedge against inflation.
The continuous quantitative easing measures by the Fed amid the COVID-19 economic crisis are providing fuel to Bitcoin. In fact, a large number of players are also neglecting Gold investments over Bitcoin. While Gold has appreciated only 30% year-to-date, the BTC price has appreciated more than 150% so far in 2020.