So many institutional companies have looked to bitcoin this year to attain their financial hopes and dreams, and now another one is being added to the list that already contains big names such as MicroStrategy and Square. The company is called Count Guggenheim Partners LLC, and it’s making a big bet on the world’s largest cryptocurrency by market cap.
Guggenheim Is Turning to Bitcoin
The firm is presently placing some of the money from its Macro Opportunities Fund – presently worth $5.3 billion at the time of writing – into the Grayscale Bitcoin Trust. Grayscale is specifically invested in BTC and regularly monitors the price and expenses associated with the digital currency.
In a statement, executives of Guggenheim mentioned:
The Guggenheim Macro Opportunities Fund may seek investment exposure to bitcoin indirectly through investing up to ten percent of its net asset value in Grayscale Bitcoin Trust.
The funny thing about the maneuver is that in the same statement, Guggenheim clearly admits that there are risks associated with digital assets, referring to them as “highly volatile.” The company also cites regulatory influence in the future as a potential cause for fear, along with more cryptocurrencies in the future that can offer competition and unregulated exchanges.
The executives continue to say:
Except for its investment in GBTC, the fund will not invest, directly or indirectly, in cryptocurrencies.
Clearly, the company appears rather concerned and worried about the status of bitcoin and its altcoin cousins. There is worry in the company’s words, so one can’t help but wonder why they’re even making this move in the first place.
Perhaps Guggenheim is quick to recognize that cryptocurrency is here to stay and jumping on the bitcoin bandwagon is likely to do it some good in the future despite the potential risks. If this is the case, that also explains why Guggenheim isn’t purchasing bitcoin flat out but is rather looking to gain some minor exposure at first through Grayscale. This will likely give it a taste of the crypto world without getting fully involved.
More Institutions Are Coming
Either way, it’s a positive step forward, and gives bitcoin a bit more institutional support before the year is out. 2020 has clearly been the era of institutions for crypto. Companies such as MicroStrategy have invested as much as $400 million in bitcoin, while others such as Square and Stone Ridge have placed anywhere between $50 and $100 million into the asset.
For the first time in a while, bitcoin is now being viewed not just as a speculative asset that can potentially diversify one’s portfolio, but rather as a store of value that can hedge one’s wealth against inflation and other harsh economic circumstances. Granted bitcoin can sustain this reputation, there is no reason that the asset cannot once again reach its all-time high and beyond.