Guggenheim Doubles Down On Its Bitcoin Plans

Bitcoin Cryptocurrency Investing

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Jaroslaw Adamowski

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Jaroslaw Adamowski

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June 26, 2023

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Guggenheim Active Allocation Fund, controlled by global investment and advisory firm Guggenheim Partners, has announced plans to launch a new fund that may seek investment exposure to cryptocurrencies, with emphasis on bitcoin (BTC).

The fund unveiled its project in a filing to the US Securities and Exchange Commission (SEC), saying its potential investments may come through “cash settled derivatives instruments, such as cash settled exchange traded futures, or through investment vehicles that offer exposure to Bitcoin or other cryptocurrencies through direct investments or indirect exposure such as derivatives contracts.”

This said, Guggenheim Funds Trust recognizes that numerous “significant aspects of the tax treatment of investments in cryptocurrency are uncertain, and a direct or an indirect investment in cryptocurrency may produce non-qualifying income.”

The filing described crypto as a new technological innovation with a limited history, as well as a highly speculative asset, stating that 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.”

Scott Minerd, Global Chief Investment Officer (CIO) at Guggenheim Partners, with three others, will be responsible for the day-to-day management of the Fund’s portfolio.

Minerd is also known for his previous warnings about the prospects of a BTC rally.

Last January, he said bitcoin’s “parabolic rise is unsustainable in the near term,” vulnerable to a setback, and that “the target technical upside of USD 35,000 has been exceeded.”

Notably, this statement was made as the company itself was waiting for permission to reserve the right to invest as much as 10% of its USD 5.3bn Macro Opportunities Fund in the Grayscale Bitcoin Trust.

In an interview with Bloomberg that same month, Minerd said the cryptocurrency price spike was moving the markets “into speculative frenzy,” but also suggesting that, owing to the demand by some of its clients, Guggenheim Partners had already boarded the bitcoin train.

This type of contradictory actions by this and other companies triggered comments that Guggenheim’s BTC-related moves could be part of a Wall Street-driven ‘make-bitcoin-cheaper’ game.

The CIO also had a warning last week.

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