Guggenheim to invest $500 million after SEC approval, becoming GBTC's third largest investor

On February 1, U.S. time, the U.S. Securities and Exchange Commission (SEC) approved the application of global investment advisory firm Guggenheim to invest $500 million in Bitcoin through digital asset management company GrayScale.
According to SEC documents, Guggenheim filed an application on November 27, 2020. The application seeks SEC permission for the firm’s $5 billion Macro Opportunity Fund to invest 10% of its net asset value in GrayScale’s Bitcoin Trust (BTC) to obtain venture capital.
The application states: “The Guggenheim Macro Opportunity Fund may seek to invest indirectly by investing up to 10% of its net assets in GrayScale’s Bitcoin Trust (GrayScale: a company that provides investment vehicles for private individuals to invest in Bitcoin). Given the size of the funds invested by the Fund in GBTC, investments will be made through subsidiaries.”

As the world's largest digital asset management fund, GrayScale currently manages $27.7 billion in net assets, of which GBTC accounts for 83% of the total, or $22.906 billion.
Guggenheim’s total net assets at the time of its filing were $4.97 billion, according to data provided by Fidelity, meaning the fund could invest up to $497 million in GrayScale’s GBTC.
Fidelity estimates the fund’s current value at $5.581 billion, which would allow Guggenheim to invest approximately $558 million in BTC through GrayScale. This investment would make Guggenheim the third-largest holder of GBTC, holding 0.26% (1,671,951 shares) at the current price of $34.69 per GBTC.
The first and second holders of GBTC are ARK Investment Management and Horizon Kinetics Asset Management, holding 6,257,925 shares (0.98%) and 2,319,090 shares (0.36%) respectively.
We know that GBTC allows investors to obtain Bitcoin in the form of a fund, with the disadvantage that it trades at a price 20% to 30% higher than its potential value.
According to GrayScale's fourth quarter 2020 report, GBTC's return rate was 26.43%, which is generally consistent with Bitcoin's return rate. Therefore, it is also prone to violent fluctuations when Bitcoin fluctuates violently.

Michael Larkin of Investor's Business Daily believes that GBTC is not a sound investment at the moment and that investors seeking quality stocks should research the stock market for other companies with potential value.
“Those who want to invest in the cryptocurrency market would be better off waiting for a new entry point to appear, as current investments could result in huge losses given the asset’s sharp decline.” (Blockchain Knights)