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REUTERS / Stephen Lam
- Guggenheim Partners revealed in a regulatory filing Friday that its Macro Opportunities Fund held the right to invest up to 10% of its net asset value in Grayscale Bitcoin Trust.
- The trust only invests in Bitcoin, and a 10% bet of the Guggenheim fund would equate to around $ 530 million.
- The cryptocurrency surged to an intraday high of $ 19,873.23 on Monday, eclipsing the record set in December 2017, before slashing gains.
- Watch live bitcoin trading here.
Guggenheim Partners is the latest Wall Street firm to show interest in Bitcoin, and a regulatory filing on Friday indicates the firm could make a massive investment in the booming cryptocurrency.
Guggenheim revealed in a Securities and Exchange Commission filing released on Friday that its Macro Opportunities Fund held the right to invest up to 10% of its net asset value in Grayscale Bitcoin Trust. The trust invests only in Bitcoin, allowing its shares to act as a proxy for popular cryptocurrency.
The fund manages around $ 5.3 billion in assets, a 10% investment worth around $ 530 million.
Guggenheim described cryptocurrencies as “digital assets designed as a medium of exchange.” The firm added that while it may gain exposure to Bitcoin through grayscale trust, it has no other intention of investing in cryptocurrencies directly or indirectly.
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Bitcoin hit an all-time high on Monday, breaking the record high of $ 19,511 set in December 2017. The token climbed to $ 19,873.23 before parrying some gains.
Guggenheim joins other Wall Street heavyweights who have expressed optimism about the volatile token. Mike Novogratz, the former hedge fund manager who has long pushed for widespread use of cryptocurrencies, hailed PayPal’s October decision to embrace them, describing it as an “exciting day” for technology.
“All banks will now be in a race to serve crypto,” he said tweeted October 21. “We crossed paths with the Rubicon people.”
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Billionaire investor Paul Tudor Jones also backed Bitcoin last month, calling the asset “the best inflation trade.” With the Federal Reserve ready to temporarily allow inflation above 2%, the decentralized nature of Bitcoin protects its value from faster price growth, Jones said.
The Guggenheim filing suggests the company is bullish on Bitcoin but still sees several risks to the coin’s rise to prominence. A stake in Bitcoin could fall prey to its “highly volatile” nature, the company said on the file. He added that the value of the cryptocurrency “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.
Bitcoin traded at $ 19,232.35 at 12:25 p.m. ET, up about 166% year-to-date.
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