Guggenheim says it could invest up to $530 million in a bitcoin trust as the cryptocurrency leaps to record highs
- Guggenheim Partners disclosed in a regulatory filing 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 solely in Bitcoin, and a 10% bet from Guggenheim's fund would equate to roughly $530 million.
- The cryptocurrency on Monday leaped to an all-time intraday high of $19,873.23, eclipsing the record set in December 2017, before paring gains.
- Watch bitcoin trade live here.
Guggenheim Partners is the latest Wall Street firm to show interest in Bitcoin, and a Friday regulatory filing signals the firm could make a massive investment in the soaring cryptocurrency.
Guggenheim disclosed in a Securities and Exchange Commission filing published 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 solely in Bitcoin, allowing its shares to serve as a proxy for the popular cryptocurrency.
The fund manages roughly $5.3 billion in assets, making a 10% investment worth about $530 million.
Guggenheim described cryptocurrencies as "digital assets designed as a medium of exchange." The firm added that, though it could gain exposure to Bitcoin through the Grayscale trust, it had no other plans to invest directly or indirectly in cryptocurrencies.
Bitcoin charged to a record high on Monday, surpassing the record of $19,511 set in December 2017. The token jumped as high as $19,873.23 before paring some gains.
Guggenheim joins other Wall Street heavyweights who've expressed bullishness toward the volatile token. Mike Novogratz, the former hedge-fund manager who has long pushed for widespread use of cryptocurrencies, praised PayPal's decision in October to adopt them, describing it as an "exciting day" for the technology.
"All banks will now be on a race to service crypto," he tweeted on October 21. "We have crossed the rubicon people."
The billionaire investor Paul Tudor Jones also backed Bitcoin last month, deeming the asset "the best inflation trade." With the Federal Reserve set to temporarily allow inflation above 2%, Bitcoin's decentralized nature protects its value from faster price growth, Jones said.
Guggenheim's filing suggests the firm is optimistic about Bitcoin but still sees several risks to the coin's run-up. A stake in Bitcoin could fall prey to its "highly volatile" nature, the firm said in the filing. It added that the cryptocurrency's value "could drop precipitously" for reasons including regulatory changes, a change in user preference to a competing token, or a "crisis of confidence" in the Bitcoin network.
Bitcoin traded at $19,232.35 as of 12:25 p.m. ET, up roughly 166% year-to-date.
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