Institutional investors are increasingly making their voice heard in the Bitcoin (BTC) market, which is not without profiting from asset prices. It is the turn of the financial services company Guggenheim Partners to join the club of institutional acquiring bitcoin. The company has just filed a petition with the SEC which should authorize the Macro Opportunities fund to invest in cryptocurrency. Details below.
An investment of over $ 500 million in Grayscale’s Bitcoin Trust
Guggenheim Partners no longer hides her ambitions in the market and also wants to gain exposure to bitcoin. The company worth more than $ 275 billion has indeed filed with the SEC a petition so that its Macro Opportunities fund invests a substantial amount in bitcoin. This exposure to cryptocurrency should also take place from the Grayscale crypto asset fund manager which manages the investments of several institutions. The request specifies that ” The Guggenheim Macro Opportunities Fund may seek exposure to Bitcoin indirectly by investing up to 10% of its net asset value in Grayscale Bitcoin Trust (GBTC) “.
To approximate the value of such an investment, we must look at the total amount available Macro Opportunities. The latter would hold $ 5.3 billion in assets under management according to the independent rating company Morningstar. If the fund were to invest the full 10% in Grayscale’s Bitcoin Trust, so it would be worth more than 500 million dollars. On this subject, Guggenheim describes the overall strategy of the fund in favor of institutional type equities as one of the most compelling ideas of the investment team.
Investors go wild in the BTC market
The second half of 2020 will have been marked by significant investments made by institutional investors. In August, Microstrategy thus bought nearly 40,000 Bitcoin followed two months later by the financial services company Square who bought $ 50 million worth of Bitcoin. The preparatory process for Guggenheim indicates thatanother wave of similar investments is imminent. However, this is not just a fad, as the company takes the trouble to present the potential risks of such an investment in its application.
Yes Guggenheim y describes bitcoin as digital assets designed to serve as a medium of exchange, she is aware of the danger of the lack of regulation of cryptocurrency exchanges. The other risks mentioned are in particular uncertainty regarding tax laws and regulations and the significant historical premium of GBTC over equity in assets.
The market is likely to experience a shortage in Bitcoin as institutions flood it with hundreds of millions of dollars. This is good for Grayscale whose the Bitcoin Trust is definitely enjoying a good rating at the end of the year.