Guggenheim Partners is the newest Wall Street company to take an interest in bitcoin. On Friday, the regulatory statement hinted that companies could make large investments in emerging cryptocurrencies.
In a statement released by the Securities and Exchange Commission (SEC) on Friday, Guggenheim announced that the Macro Opportunity Fund has the right to invest up to 10% of its net asset value in the Grayscale Bitcoin Trust. The trust only invests in Bitcoin, so its shares can proxy for the popular cryptocurrency.
The fund manages about $ 5.3 billion in assets and invests 10% of about $530 million.
Guggenheim describes cryptocurrency as a digital asset created as a medium of exchange. The company adds that although it may gain exposure to Bitcoin through Grayscale, there are no other plans to invest directly or indirectly in cryptocurrency.
Joining the Wall Street Flow
Guggenheim joins other heavyweights on Wall Street that have shown bullishness toward the volatile token. Mike Novogratz, a former hedge fund manager who has long insisted on the widespread use of cryptocurrency, praised PayPal’s decision to accept it in October, calling it an exciting day for the technology.
He tweeted on October 21 that all banks will now compete for crypto services, and we overtook the Rubicon men.
Billionaire Paul Tudor Jones also supported Bitcoin last month, calling the asset its “best inflationary trade.” With the Federal Reserve temporarily allowing inflation above 2%, Bitcoin’s decentralized nature hedged its value from faster price growth, said Jones.
Bitcoin hit a record high on Monday, beating the record set in December 2017 of $ 19,511. The token rose to $ 19,873.23 before reporting some gains.
The Bitcoin High Optimism
The Guggenheim statement suggests that the company is optimistic about bitcoin but still sees some coin risk. Bitcoin staking could fall victim to its very volatile nature, the company said in a statement. It added that cryptocurrencies’ value could drop sharply for reasons such as changing regulations, changing consumer preferences for competitor markers, or a “crisis of confidence” on the Bitcoin network.
The institutional investor’s appetite increased due to Bitcoin being on the brink of record highs and the growing confidence in the long history of digital wealth.
Raul Pal, Global Macro Investor and CEO of Real Vision said in an interview that Bitcoin’s most conservative goal is to rally up to $ 150,000 by November 2021. If large amounts of institutional money continue to flow into the crypto space, Bitcoin could even go up to $ 250,000, Pal added.