The latest Bitcoin price surge happened as one of the world’s biggest asset managers Guggenheim Partners is looking for an entry in Bitcoin. Although the exact investment details aren’t available at this point, Guggenheim is planning to get some Bitcoin exposure for its $5 billion Macro Opportunities Fund.
While Guggenheim is not planning to buy BTC directly, it will gain exposure through the Grayscale Bitcoin Trust (GBTC) which surpassed $10 billion of assets under management last week before the BTC price correction. As per industry reports, Guggenheim will have 10% of exposure from its Macro Opportunities Fund.
Guggenheim’s $5 billion Macro Opportunities Fund wants Bitcoin exposure.
On Friday they filed an SEC amendment allowing them to invest up to 10% of their fund in $GBTC.
A 10% investment would be worth $487M, and would be $200M+ larger than their next largest position. pic.twitter.com/U34xqkBOH1
— Kevin Rooke (@kerooke) November 28, 2020
This is a sizeable investment and the only company after MicroStrategy to plan close to a $500 million investment in Bitcoin (BTC). Soon after MicroStrategy CEO Michael Saylor announced their Bitcoin investment in early September 2020, an umber of institutional players has queued up to buy Bitcoin. Since then, the BTC price has also surged around 60%.
Guggenheim Partners Files With the U.S. SEC
In its filing with the U.S. SEC on Friday, November 27, Guggenheim Partners noted that it might seek Bitcoin investment via GBTC and through its Macro Opportunities Fund. The filing states:
“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.
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.”
If at all the SEC approves Guggenheim’s proposal, Bitcoin is likely to move past its all-time high of $20,000 and enter the price discovery mode. The institutional inflow in Bitcoin has been massive this year unlike its bull rally of 2017. Thus, Bitcoin fundamentals have also improved considerably. Note that institutional BTC purchase usually falls in cold storage.
This might result in the BTC supply squeeze and the escalating demand can shoot prices much higher. Many analysts have already started giving six-figure targets of $100K and above by the end of 2021.
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