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Guggenheim opens door to bitcoin exposure for $5 billion macro fund via Grayscale GBTC product

Guggenheim opens door to bitcoin exposure for $5 billion macro fund via Grayscale GBTC product

Guggenheim Partners, the $200 billion-plus asset-manager, could be the latest Wall Street firm to allocate capital to the cryptocurrency market, as per a filing. 

The firm, which invests across asset classes on behalf of companies, pension funds, and sovereign wealth funds, wrote in a filing that it might “seek investment exposure to bitcoin indirectly” via Grayscale’s Bitcoin Trust product (GBTC) through its Macro Opportunities Fund. 

“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,” the November 27 dated filing with the US Securities and Exchange Commission said.

The Macro Opportunities fund is one of the firm’s best-known with more than $5 billion in assets. As per the firm’s website, it seeks to offer exposure “to the investment team’s highest-conviction ideas in the current market environment through an unconstrained approach. The strategy opportunistically allocates to other asset classes to potentially enhance return and/or mitigate risk.”

Grayscale, one of the largest crypto asset-managers, recently surpassed $10 billion in assets as bitcoin soared to highs rivaling levels in 2017. The firm’s funds have gained popularity given their similarity to exchange-traded funds and their availability through retail brokers like Charles Schwab. Still, they have traded at large premiums, which could result in retail investors purchasing a share in the fund at a much higher premium than the price at which bitcoin is trading. 

“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 firm would be the latest to signal its interest in bitcoin as a macro play. Earlier this year, investment legend Paul Tudor Jones penned a note outlining how bitcoin could serve as an inflationary hedge against aggressive central bank policy. In October, the billionaire doubled down on his position, saying that he liked bitcoin “more now than I did.” Billionaire Stanley Druckenmiller said earlier this month that he had placed a bet on bitcoin.

© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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Author: Frank Chaparro

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