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REUTERS / Stephen Lam
- Guggenheim Partners revealed in a regulatory statement on Friday that its Macro Opportunities Fund has the right to invest up to 10% of its net asset value in Grayscale Bitcoin Trust.
- The trust invests exclusively in bitcoins and a 10% bet from the Guggenheim fund equates to approximately $ 530 million.
- The cryptocurrency hit a new all-time high on Monday. The token hit an intraday high of $ 19,873.23 on Monday, eclipsing its December 2017 record of $ 19,511 before reducing gains.
- Watch live bitcoin trading here.
Guggenheim Partners is the latest Wall Street firm to show interest in bitcoin, and a regulatory statement on Friday signals that the company could make a massive investment in the rising cryptocurrency.
According to a Securities and Exchange Commission document released on Friday, Guggenheim revealed that its Macro Opportunities Fund holds the right to invest up to 10% of its net asset value in Grayscale Bitcoin Trust. The trust invests exclusively in bitcoin, allowing its shares to act as a proxy for the popular cryptocurrency.
The fund manages approximately $ 5.3 billion in assets, making a 10% investment worth approximately $ 530 million.
Guggenheim described cryptocurrencies as “digital assets designed as a medium of exchange”. The firm added that while it can gain exposure to bitcoin through grayscale trust, it has no other plans to invest directly or indirectly in cryptocurrencies.
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Bitcoin was charged at an all-time high on Monday, surpassing the previous record of $ 19,511 set in December 2017. The token jumped to $ 19,873.23 before reducing some gains.
Guggenheim joins other Wall Street heavyweights who have professed their bullish bias against the volatile token. Former hedge fund manager Mike Novogratz has long pushed for widespread use of cryptocurrencies and praised PayPal’s October decision to adopt them as an “exciting day” for technology.
“All banks will now be in a rush to serve cryptocurrencies,” he said tweeted on 21 October. “We crossed the Rubicon people”.
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Billionaire investor Paul Tudor Jones also supported bitcoin last month, believing the asset “the best inflation trade.” With the Federal Reserve set to allow for inflation above 2% for a temporary period, the decentralized nature of bitcoin protects its value from faster price growth, Jones added.
The Guggenheim filing on Friday suggests the firm is optimistic about bitcoin, but still sees several risks for the coin’s run-up. A holding in bitcoin can fall prey to its “highly volatile” nature, the company said in the document. The cryptocurrency’s value “could drop precipitously” for reasons such as regulatory changes, a change in user preference for a competing token or a “crisis of confidence” in the bitcoin network, Guggenheim added.
Bitcoin was trading at $ 19,232.35 at 12:25 pm ET on Monday, up about 166% year to date.
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