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A SEC filing on Friday indicates that the next Wall Street institution to take a public position in Bitcoin may also be among the largest so far: the $ 275 billion financial services firm Guggenheim Partners.
The Guggenheim Deposit allows the Macro Opportunities Fund to purchase GBTC, a publicly traded Bitcoin investment vehicle from Grayscale, at an indefinite time in the future.
“The Guggenheim Macro Opportunities Fund may indirectly seek exposure to bitcoin by investing up to 10% of its net asset value in Grayscale Bitcoin Trust (” GBTC “),” the document reads.
According to independent credit rating firm Morningstar, the Guggenheim Macro Opportunities fund currently has $ 5.3 billion in assets under management and has a four-star rating “based on the risk-adjusted returns of 270 non-traditional bond funds”.
Guggenheim describes the fund’s overall strategy for institutional-level equities (ticker: GIOIX) as a product of the investment team’s “conviction ideas”. If the fund took the entire 10% stake in GBTC, it would be worth north of $ 500 million.
The filing also notes a long list of potential risks to investors associated with cryptocurrencies, referred to as “digital assets designed to serve as a medium of exchange.” Risks include a lack of regulation of cryptocurrency exchange, GBTC’s historic “significant premium” to net asset value, and uncertainty regarding tax laws and regulations, among others.
This preparatory move by Guggenheim appears to be part of a series of cascading investments indicating greater acceptance of Bitcoin among major financial institutions. In August, business intelligence firm Microstrategy bought nearly 40,000 Bitcoins, resulting in a parabolic movement in the share price. Similarly, financial services firm Square, Inc bought $ 50 million worth of Bitcoin in October.
This wave of interest in institutions could quickly become an avalanche, as noted by a prominent voice in crypto journalism:
2016: institutions are coming!
2017: institutions are coming!
2018: institutions are coming!
2019: institutions are coming!
2020: the institutions are here!
2021: Damn, the institutions bought all the #Bitcoin– Jon Rice (@JonRiceCrypto) October 17, 2020
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