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Bitwise Asset Management has announced the acquisition of the Osprey Bitcoin Trust’s $120 million assets, marking a significant expansion of its Bitcoin ETF holdings.
Bitwise Acquires Osprey’s $120M Assets
The Bitwise Bitcoin ETF (BITB) just acquired the assets of the Osprey Bitcoin Trust (OBTC), which will increase its Bitcoin holdings by an extra $120 million.
In a joint statement issued on August 27, Bitwise Asset Management and Osprey Funds disclosed that they had entered into an agreement to acquire assets.
OBTC Unitholders to Receive BITB Shares
As part of the deal, when OBTC unitholders sell their OBTC shares, they would get BITB shares in exchange. It is anticipated to close “later this year,” pending closing conditions.
U.S. investors have had access to Osprey Funds’ OBTC, which has been trading on the OTC market since February 2021 and has a management fee of 0.49%, thanks to the firm’s headquarters in Fairfield, Connecticut.
Prior to its eventual conversion to a spot Bitcoin ETF, GBTC competed with the substantially bigger Grayscale Bitcoin Trust.
During January 2023, Osprey took Grayscale to court. It asserted that Grayscale was able to gain a monopolistic share in a “two-participant market” due to its deceptive advertising and promotion.
OBTC Trading Below Bitcoin’s Value
Units in the trust were trading below Bitcoin’s value by March, prompting Osprey to announce it was contemplating a possible sale or liquidation.
An X post by Osprey Funds’ founder and CEO, Greg King, stated, “We wanted a solution that worked for all and this seems to be the best option.” (27 August). As of this writing, OBTC’s website indicates that the firm is managing assets worth approximately $120.7 million.
If you’re an OBTC investor with a longer time horizon, you might have observed that the trust has returned 9.5% over the past three years, compared to 23.5% for Bitcoin. This information comes from Barchart and Yahoo Finance.
Osprey Announces Strategic Alternatives
“This announcement follows Osprey’s prior communication regarding its exploration of strategic alternatives,” said a joint statement from Osprey and Bitwise.
“The acquisition by Bitwise represents a significant step in that process, offering OBTC unitholders the opportunity to benefit from the scale and expertise of Bitwise.”
Bitwise’s ETF Nears Zero NAV Discount
In comparison to Bitcoin, OBTC has maintained a discount of about 3% to 5% over the past month, according to data from YCharts. The net asset value (NAV) premium or discount for Bitwise’s BITB has been nearly zero, bringing its price closer to Bitcoin.
Seven months after its debut, Bitwise’s spot Bitcoin ETF has attracted $2 billion in investment. A significantly reduced 0.20 percent management fee is charged.
Even yet, it hasn’t done quite as well as BlackRock’s iShares Bitcoin Trust, which has garnered over $21 billion in capital from investors since January.