She had been laid down in December 1913 as U-9 of the U-7 class for the Austro-Hungarian Navy (German: Kaiserliche und Königliche Kriegsmarine or K.u.

Six days into her first war patrol, on 22 March 1916, U-68 was sunk by Farnborough, a British Q-ship, with all hands.

A post-war German study found fault with U-68's captain for not following established procedures for avoiding decoy ships.

The Austrian specifications called for two shafts with twin diesel engines (2,300 metric horsepower (2,269 bhp; 1,692 kW) total) for surface running at up to 17 knots (31 km/h; 20 mph), and twin electric motors (1,240 PS (1,220 shp; 910 kW) total) for a maximum of 11 knots (20 km/h; 13 mph) when submerged.

Headed to her assigned operating area off Britain's west coast, Güntzel and U-68 came across Farnborough, a British Q-ship—in appearance unarmed—under the command of Gordon Campbell.

At 07:20, U-68 surfaced about 1,000 yards (910 m) astern of Farnborough, moved to the ship's port quarter, and fired a shot across the Q-ship's bow.

As U-68 began to sink, Campbell steered Farnborough over U-68's location and dropped a depth charge that blew the bow of the submarine out of the water.

Güntzel, for failing to follow established procedures for dealing with neutral-flagged vessels in order to avoid decoy ships like Farnborough.

However, Kommodore Hermann Bauer, the commander of the German High Seas Fleet U-boats, in his post-war memoirs, reports Güntzel was an inexperienced captain and had not, contrary to usual practice, been first sent to sea under a more experienced U-boat captain to gain knowledge.