A SEC filing on Friday indicates that the next Wall Street institution to take a public position in Bitcoin could also be one of the largest to date: $ 275 billion financial services firm Guggenheim Partners.
Guggenheim’s filing allows the Macro Opportunities fund to purchase GBTC, a publicly traded Bitcoin investment vehicle from Grayscale, at an undetermined point in the future.
The Guggenheim Macro Opportunities Fund can invest indirectly in bitcoin by investing up to 10% of its net asset value in Grayscale Bitcoin Trust (“GBTC”), “the filing reads.
According to independent rating agency Morningstar, the Guggenheim Macro Opportunities fund currently has $ 5.3 billion in assets under management and a four-star rating “based on risk-adjusted returns from 270 non-traditional bond funds.”
Guggenheim describes the overall fund strategy for institutional equities (ticker: GIOIX) as a product of the investment team’s “most compelling ideas”. If the fund took the full 10% stake in GBTC, it would be worth north of $ 500 million.
The filing also cites a long list of potential investor risks associated with cryptocurrencies, referred to as “digital assets designed to act as a medium of exchange.” Risks include the lack of regulation for cryptocurrency exchange, GBTC’s historic “significant premium” to net asset value, and uncertainty about tax laws and regulations, among other things.
This preliminary step by Guggenheim appears to be part of a tiered series of investments that hints at increased Bitcoin adoption by major financial institutions. In August, business intelligence company Microstrategy bought nearly 40,000 Bitcoin, which led to a parabolic price movement of the stock. Likewise, financial services provider Square, Inc bought $ 50 million in Bitcoin in October.
This rolling snowball of institutional interests can quickly become an avalanche, as noted by a prominent voice in cryptojournalism:
2016: The settings are coming!
2017: The settings are coming!
2018: The settings are coming!
2019: The institutions are coming!
2020: The institutions are here!
2021: Damn, the institutions bought all #Bitcoin
– Jon Rice (@JonRiceCrypto) October 17, 2020