Gold-Focused Investment Manager Discloses Exposure to Bitcoin via GBTC

Investment manager, US Global Investors, which is well-known for specializing in gold and precious metals, disclosed in its latest regulatory filing with the Securities and Exchange Commission (SEC) that it now has exposure to Bitcoin.

The Texas-based company added GBTC shares in three of its funds viz Gold and Precious Metals Fund; Global Resources Fund; and World Precious Minerals Fund.

For the quarter ending June 30, the company reported owning 19,000 shares of Grayscale Bitcoin Trust (GBTC), currently worth just under $740k.

According to the document, the company further categorizes the investment type to be “Equity-common.”

GBTC is currently trading at a discount of 13.94% to the underlying Bitcoin’s price. This discount has been prevailing for the last six months, going as far as 21.23% in mid-May.

While it may come as a surprise that a gold favored firm is investing in cryptocurrency, gold bug Peter Shiff said, “this is not a surprise nor does it indicate a shift in the way other gold equity managers view crypto or Bitcoin,” noting that the CEO of US Global Investors, Frank Holmes is also the CEO of Hive Blockchain and has been active in crypto since 2017.

Ever since Bitcoin’s creation in 2009, which is currently worth more than $48k, gold has only grown from $890 to $1,815, representing a growth of only about 115%. In early August last year, the precious metal did hit a new all-time high but could only reach $2,075, while BTC went to nearly a $65k peak in April this year.

Bitcoin is still up 14.5% in August and 64% YTD compared to bullion’s -0.19% and -4.46% performance, respectively.

The institutionalization of Bitcoin and crypto has been happening at a rapid pace this year in the aftermath of pandemic and ultra-loose monetary policy, which led to a surge in inflation while the central banks keep the interest rates virtually zero or in the sub-zero territory.

As we reported recently, Bill Miller also reported owning 1.5 million shares of GBTC in its Miller Opportunity Trust, and Morgan Stanely disclosed that it owns a huge amount of GBTC shares as well.

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