Guggenheim Creating Listed ESG-Friendly Crypto Fund

Guggenheim’s Active Allocation Fund could seek exposure to bitcoin, crypto derivatives, and other digital assets — provided they are ESG friendly.

article-image
share

key takeaways

  • Filing follows Guggenheim’s Macro Opportunities Fund which filed its intent to hold crypto in late 2020
  • The fund will only invest in assets that meet an Environmental, Social, and Corporate Governance (ESG) criteria according to filings

Despite the beginnings of a bear market for bitcoin, institutional investors haven’t lost interest as Guggenheim Investments filed for a new fund called the Guggenheim Active Allocation Fund which may actively seek out investment in the digital assets space according to SEC filings.

Filings show that the fund, which is expected to be publicly traded under the ticker GUG, “may seek investment exposure to cryptocurrency” via cash-settled derivatives such as what’s traded on the Chicago Mercantile Exchange (CME) and Cboe Global Markets. The filings also noted that the fund may invest in publicly traded securities, other investment funds that hold crypto, as well as income securities both in the US and emerging markets. 

Guggenheim’s chief investment officer Scott Minerd is known for his bullish stance on bitcoin. During an interview with Bloomberg late last year, Minerd predicted that its price could hit $400,000.

“I think one thing that we’re seeing is the sudden interest in retail,” he said during the interview with Bloomberg. “We’re moving into a speculative frenzy.”

This isn’t the first time that Guggenheim has offered a fund with crypto-exposure to clients. In November 2020, the company launched what it calls a “Macro Opportunities Fund” which would allocate 10% of its holdings to bitcoin via investments in Grayscale’s Bitcoin Trust. 

But between now and then a few things have changed: namely the obsession with ESG. While ESG mandates for managed assets is nothing new, Deloitte estimated in 2020 that by 2025 there will be $34.5 trillion in managed assets with an ESG mandate, but the combination of ESG and bitcoin is. 

Driven by Tesla CEO Elon Musk’s counterfactual comments about bitcoin’s carbon footprint, investors are taking a keen interest in the perception of ‘dirty bitcoin’ and, where mandated, dump the asset from their portfolio. 

In an earlier interview with Blockworks, Galaxy Digital’s Sebastian Corrochano said that the narrative of concern over bitcoin’s carbon footprint from an ESG point of view was the prevailing one which took the wind out of bitcoin’s sails earlier this month. 

“If the Darwinian concept of which narrative is most important, Elon Musk’s tweeting which started from last week seems to be the primary culprit,” Corrochano said. “The number of firms that have ESG mandates is nearly 50% of institutional investors and that number has doubled in about 10 years.” 

Corrochano also mentioned that there’s a heightened difficulty in attracting that “next institutional dollar” that goes towards the industry given heightened ESG sensitivities.  

But at the same time, if Guggenheim is looking to invest in ESG-friendly businesses in the crypto space, a plethora has popped up during the last few years particularly in the zero-carbon mining sector. That next institutional dollar might not be so hard to fight for, if it’s directed to the right place.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

AERODROME TEMPLATE.png

Research

Aerodrome is a "MetaDEX" that combines elements of various DEX primitives such as Uniswap V2 and V3, Curve, Convex, and Votium. Since its launch on Base, it has become the largest protocol by TVL with more than $495M in value locked, doubling Uniswap's Base deployment.

article-image

The SEC has signaled a timeline to issuers that could lead to a July 23 launch for the ETH funds, people close to the process told Blockworks

article-image

PayPal has unequivocally made a name for itself as a crypto adopter among fintech giants

article-image

Also, a look into how the highly-debated SAB 121 could end up shaking out for crypto custodians

article-image

Vance, an Ohio Republican, is largely seen as crypto-friendly

article-image

Plus, all the world is green as prices across the crypto space rally, with solana reaching a nearly two-week high

article-image

Investors add to crypto positions after “turnaround in sentiment due to lower-than-expected CPI,” CoinShares research head says