Guggenheim Investment Fund to Invest $497 Million in Grayscale’s GBTC Seeking Bitcoin Exposure

Guggenheim’s billion-dollar Marco Opportunities Fund (MOF) may seek indirect exposure to BTC through the investment of 10% of its net asset value into Grayscale’s BTC Trust (GBTC). The investment (when complete) means MOF will have committed as much as $497 million into the GBTC.

In a November 27 amended prospectus filing with the U.S. SEC, Guggenheim explains the rationale for seeking indirect exposure to BTC. According to the explanation, Guggenheim’s MOF wants to achieve its investment objective by “investing in a wide range of fixed-income and other debt and equity securities.” This includes exposure to cryptocurrencies which the fund’s management believes will “offer (an) attractive yield and/or capital appreciation potential.”

Still, in the same filing, the investment company acknowledges the risks associated with investing in cryptocurrencies in general. Consequently, management says the “Fund’s exposure to cryptocurrency may change over time.”

Also, as regulators zero in on cryptocurrencies and in particular crypto exchanges, Guggenheim hints this will have a bearing on the fund’s decision-making process. The document explains the fund’s understanding as follows:

Cryptocurrency is a new technological innovation with a limited history; it is a highly speculative asset and future regulatory actions or policies may limit, perhaps to a materially adverse extent, the value of the fund’s indirect investment in cryptocurrency and the ability to exchange a cryptocurrency or utilize it for payments.

Better Understanding of the Risks

Meanwhile, the filing also details the tax implications that may arise as a consequence of being exposed to the highly volatile BTC.

Although Guggenheim MOF is not directly buying BTC, still the commitment by a large institutional investor to put 10% of the fund’s net worth indirectly into BTC is another milestone for the top crypto. The approximately half a billion-dollar commitment suggests that many larger investors now understand not only the advantages, but also the risks associated with the inclusion of cryptocurrencies in their portfolios.

What are your thoughts about Guggenheim MOF’s intention to get exposed to BTC via GBTC? Share your views in the comments section below.

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