Fund administration firm Guggenheim Companions has launched a brand new fund—the Guggenheim Lively Allocation Fund—searching for publicity to and different cryptocurrencies, per a submitting with the Securities and Trade Fee (SEC).
In accordance with the SEC filing, the brand new fund “could search funding publicity to cryptocurrency (notably, Bitcoin)” through cash-settled derivatives devices. Bitcoin futures on each the Chicago Mercantile Trade (CME) and Cboe International Markets are two examples that provide this exact instrument.
Guggenheim wasted no time in outlining a number of the largest dangers dealing with cryptocurrency investments.
The agency listed quite a lot of dangers that embody crypto’s unsure regulatory atmosphere, the general public notion of crypto, cyber dangers, and even the “attainable cessation or reversal within the adoption and use of cryptocurrency and different digital property.”
“Cryptocurrency is a brand new technological innovation with a restricted historical past; it’s a extremely speculative asset and future regulatory actions or insurance policies could restrict, maybe to a materially opposed extent, the worth of the Fund’s oblique funding in cryptocurrency,” the submitting added.
In addition they point out that “ESG standards” will probably be utilized to all investments within the fund. The Environmental, Social, and Company Governance (ESG) standards discuss with how an funding could influence sustainability objectives and broader society.
In November 2020, Guggenheim filed for the same fund known as the “Macro Alternatives Fund.” The $5.3 billion fund would put 10% of its web asset worth in Grayscale’s Bitcoin product, GBTC.
Regardless of the agency’s new crypto fund, CEO Scott Minerd has made some bullish and bearish statements on Bitcoin previously.
Earlier than Christmas final yr, Minerd prompt that Bitcoin’s worth might exceed $400,000. In January of this yr, he doubled down on that prediction.
“I feel one factor that we’re seeing is the sudden curiosity in retail,” he stated, including, “We’re shifting right into a speculative frenzy.”
However regardless of the lofty predictions for Bitcoin’s worth, Minerd poured chilly water on the flagship cryptocurrency simply because it reached lofty all-time highs of over $60,000.
“Issues are too frothy,” Minerd stated in April this yr, concurrently suggesting that Bitcoin might fall by 50% from its $60,000 heights.
Shortly after, Bitcoin plummeted to $32,000 by Could 23. At the moment, the main cryptocurrency is buying and selling arms at roughly $37,000
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