Global investment powerhouse, Guggenheim Partners is getting ready to invest about $500 million dollars into the flagship crypto asset, Bitcoin.
According to its recent filing with the US Securities and Exchange Commission (SEC), the Wall Street giant has about $295 billion assets under management is seeking permission for one of its funds to take a substantial stake in the Grayscale Bitcoin Trust (GBTC).
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“The Guggenheim Macro Opportunities Fund may seek investment exposure to Bitcoin indirectly through investing up to 10% of its net asset value in Grayscale Bitcoin Trust. To the extent the Fund invests in GBTC, it will do so through the Subsidiary. Except for its investment in GBTC, the Fund will not invest, directly or indirectly, in cryptocurrencies,” the report said.
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What you should know
The Investment giant, Guggenheim Partners provides services such as investment banking, broker-dealer services in capital markets, and asset management, It has more than $295 billion under its asset management. The elite investment bank is primarily known for its solid investments returns in entertainment and media firms
The investment company, However, spoke on the risks associated in investing such assets, as it took into consideration the very high volatility it often exhibits when compared to other financial instruments, meaning such attributes could result in huge losses for the company.
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“The price of Bitcoin could drop precipitously (including to zero) for a variety of reasons, including, but not limited to, regulatory changes, a crisis of confidence in the Bitcoin network, or a change in user preference to competing cryptocurrencies. The Fund’s exposure to cryptocurrency can result in substantial losses to the Fund.”
Bottom-line: With a blurry global outlook gradually becoming a daily norm, institutional funds around the globe have been trooping in droves to have a stake in crypto assets, particularly Bitcoin which all have been outperforming other financial assets in 2020.