Guggenheim Investments, a renowned global investment firm, has filed with the US Securities and Exchange Commission (SEC) for a new fund that might seek some exposure to bitcoin (BTC). This new Guggenheim Active Allocation Fund will operate as a diversified, closed-end management investment fund.
According to a Tuesday filing, the fund may seek investment exposure to cryptos like Bitcoin via cash-settled derivatives instruments. These instruments include investment tools offering exposure to BTC, exchange-traded futures, and other cryptos using direct investments or indirect exposure such as the derivatives contracts.
The firm said that the fund’s exposure to cryptocurrency can result in considerable losses to the fund, citing several risks associated with the industry:
“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.”
Based on the document, Scott Minerd, Guggenheim’s chief investment officer, will be responsible for the day-to-day management of the fund’s portfolio alongside managing director Steve Brown, assistant CIO Anne Bookwalter Walsh, and director Adam Bloch.
In 2021, Guggenheim published another SEC filing, saying that its Guggenheim Macro Opportunities Fund might seek some indirect exposure to bitcoin by investing around 10% of its net asset value in Grayscale Bitcoin Trust.
Minerd is famous for his somehow mixed stand on crypto and Bitcoin as the executive referred to the cryptocurrency market as ‘Tulipmania’ after BTC plunged to around $30,000 on May 19. Despite comparing the crypto sector to a financial bubble, Minerd is still bullish on BTC in the long term, projecting earlier in 2021 that bitcoin can possibly explode to reach $600,000.