Wall Street giant with $295 billion in assets will invest in Bitcoin

  • The Guggenheim Funds Trust will invest over $500 million from the Macro Opportunities Fund into the Grayscale Bitcoin Trust (GBTC).
  • With more than $295 billion in assets under management, Guggenheim Partners will be the largest company to date to buy Bitcoin.

According to a document filed with the U.S. Securities and Exchange Commission (SEC), another Wall Street giant is planning to invest in Bitcoin. The Guggenheim Funds Trust filed an amendment with the SEC on Friday that allows its $5 billion Macro Opportunities Fund to gain exposure to Bitcoin.

Specifically, the Fund plans to invest a full 10% of its net asset value in the Grayscale Bitcoin Trust (GBTC). The document filed with the SEC states:

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 (“GBTC”), a privately offered investment vehicle that invests in bitcoin. To the extent the Fund invests in GBTC, it will do so through the Subsidiary.

According to the independent rating firm Morningstar, the Guggenheim Macro Opportunities Fund currently has $5.3 billion in assets under management, which means that the Fund may invest up to $530 million in GBTC. In general, Guggenheim’s market entry will be a new record. Guggenheim Partners is a global investment and advisory firm with more than $295 billion in assets under management, making it the largest company to date to publicly announce its Bitcoin investment.

The investment in Bitcoin will also be a record for the Guggenheim Macro Opportunities Fund. As Kevin Rooke explained on Twitter, the 10% investment will be more than $200 million larger than the Macro Opportunities Fund’s next largest position.

Through its investment in the Grayscale Bitcoin Trust, Guggenheim will not directly hold Bitcoin, as Grayscale Investments will take over this role. However, Guggenheim will be exposed to the usual investment risks associated with cryptocurrencies.

The filing with the SEC contains a long list of just these risks. Among other things, the Company cites the lack of regulation, uncertainty regarding tax laws and regulations and the historically “significant markup” of GBTC. Regarding the latter, the document states:

Shares of GBTC have historically traded, and may continue to trade, at a significant premium or discount to net asset value. If GBTC were to cease to trade at a premium to its NAV, the value of the Fund’s investment in GBTC could decrease, even if the value of GBTC’s underlying holdings in bitcoin does not decrease.

The avalanche of institutional Bitcoin investors continues

After MicroStrategy CEO Michael Saylor announced in August the adaptation of Bitcoin as a “primary reserve asset” for his company, there was an avalanche of institutional investors who made public their renewed interest in Bitcoin. With Jack Dorsey’s Square, PayPal and investor legends such as Paul Tudor Jones, Stanley Druckenmiller and Bill Pulte, to name but a few, more and more are recognizing Bitcoin’s potential in times of expansive monetary policy.

Grayscale Investments is the world’s largest crypto asset manager and currently manages USD 10.8 billion in cryptocurrencies, with the Grayscale Bitcoin Trust alone accounting for over USD 9 billion. In recent months, Grayscale has been in the headlines due to the massive increase in interest from its institutional clients. According to the quarterly report for Q3, the GBTC absorbed 77% of all newly mined Bitcoins.

About Author

Jake Simmons has been a crypto enthusiast since 2016, and since hearing about Bitcoin and blockchain technology, he's been involved with the subject every day. Beyond cryptocurrencies, Jake studied computer science and worked for 2 years for a startup in the blockchain sector. At CNF he is responsible for technical issues. His goal is to make the world aware of cryptocurrencies in a simple and understandable way.

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