Guggenheim says it could invest up to $530 million in a bitcoin trust as the cryptocurrency flirts with new record highs

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  • Guggenheim Partners revealed in a Friday regulatory filing that its Macro Opportunities Fund holds the right to invest up to 10% of its net asset value in Grayscale Bitcoin Trust.
  • The trust solely invests in bitcoin, and a 10% bet from Guggenheim’s fund equates to roughly $530 million.
  • The filing comes as bitcoin climbs back above $19,000 after tumbling through the Thanksgiving holiday. Though the token has more than doubled through the year, it still trades below its 2017 record of $19,783.06.
  • 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 revealed its Macro Opportunities Fund holds the right to invest up to 10% of its net asset value in Grayscale Bitcoin Trust, according to a Securities and Exchange Commission filing published Friday. The trust solely invests 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 can gain exposure to bitcoin through the Grayscale trust, it has no other plans to invest directly or indirectly in cryptocurrencies.

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The filing comes as bitcoin continues to climb to record highs after faltering last week. The token jumped as high as $19,500 on Wednesday before a sell-off through the Thanksgiving holiday dragged prices as low as $16,200.

Bullish momentum returned through the weekend, and bitcoin traded just below $19,000 Monday morning. The token would need to trade above $19,783.06 to set a new record.

Guggenheim joins other Wall Street heavyweights who’ve professed their bullishness toward the volatile token. Former hedge fund manager Mike Novogratz has long pushed for widespread use of cryptocurrencies and praised PayPal’s October decision to adopt them 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.”

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Billionaire investor Paul Tudor Jones also backed bitcoin last month, deeming the asset “the best inflation trade.” With the Federal Reserve set to allow inflation above 2% for a temporary period, bitcoin’s decentralized nature protects its value from faster price growth, Jones added.

Guggenheim’s Friday filing suggests the firm is optimistic toward bitcoin, but it still sees several risks to the coin’s run-up. A stake in bitcoin can fall prey to its “highly volatile” nature, the firm said in the filing. 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, Guggenheim added.

Bitcoin traded at $19,160.77 as of 8:52 a.m. ET Monday, up roughly 165% year-to-date.

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