The filing came as the asset management firm’s chief investment officer repeatedly made bearish bitcoin predictions, calling cryptocurrency Tulipmania.
Guggenheim Launching Fund Which Could Have Exposure to Bitcoin
Guggenheim Funds Investment Advisors LLC filed a registration statement with the U.S. Securities and Exchange Commission (SEC) Tuesday for the Guggenheim Active Allocation Fund. Guggenheim Investments has about $270 billion in total assets under management across fixed income, equity, and alternative strategies.
The filing describes the fund as “a newly-organized, diversified, closed-end management investment company.” Among the investments that the new fund can invest in are “Cryptocurrency, Digital Assets, or Virtual Currency Investments.” The filing states:
The fund may seek investment exposure to cryptocurrency (notably, bitcoin) … 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.
After outlining the risks associated with investing in bitcoin, the company noted that the fund’s “exposure to cryptocurrency may change over time and, accordingly, such exposure may not always be represented in the fund’s portfolio.”
The Guggenheim filing followed several bearish predictions by the chief investment officer (CIO) of Guggenheim Partners, Scott Minerd, who is also the chairman of Guggenheim Investments, the global asset management and investment advisory division of Guggenheim Partners.
While Minerd has a long-term prediction of $600K for BTC, he has been saying that the price of bitcoin will crash in the short term and could fall 50% to the $20K – $30K level. Last week, he predicted more heavy sell-off for bitcoin after warning of a major correction in April, stating that the cryptocurrency looked “very frothy.”
According to the SEC filing, Minerd will be responsible for the day-to-day management of the Guggenheim Active Allocation Fund’s portfolio.
Minerd tweeted on May 28, “Crypto investors be warned: be prepared for a volatile holiday weekend.” On May 19, he wrote, “Crypto has proven to be Tulipmania. As prices rise, tulip bulbs and cryptocurrencies multiply until supply swamps demand at previous market clearing prices,” elaborating:
This is not the death of crypto just as the collapse of Tulipmania was not the end of tulip bulbs.
Some people in the crypto community speculate that Minerd made bearish predictions to allow Guggenheim to buy the dip.
Guggenheim has another fund that may have exposure to bitcoin. The Guggenheim Macro Opportunities Fund may seek investment exposure to bitcoin indirectly through investing up to 10% of its net asset value in Grayscale Bitcoin Trust (GBTC), its SEC filing describes.
