Bitwise ETF fund (BITB) will soon acquire $120 million worth of Bitcoin following its plan to purchase assets from Osprey Bitcoin Trust (OBTC). The agreement, announced on August 27 in a joint statement by Bitwise Asset Management and Osprey Funds, allows the two to sign an Asset Purchase Agreement. As part of the transaction, OBTC holders will receive BITB shares.
Notable Development in the ETF Sector
Connecticut-based Osprey Funds, headquartered in Fairfield, began trading its OBTC on the OTC market in February 2021, offering it to U.S. investors with a 0.49% management fee. At the time, it was a competitor to the much larger Grayscale Bitcoin Trust, which was expected to eventually convert into a spot Bitcoin ETF fund. In January 2023, Osprey even sued Grayscale, alleging that Grayscale’s misleading advertisements and promotions allowed it to gain a monopoly share in a two-participant market. By March, Osprey stated it was considering a possible sale or liquidation after finding that units in the trust were trading at a price below Bitcoin’s value. As of the writing of this article, OBTC’s website shows its assets under management are approximately $120.7 million.
Details of the Matter
YCharts data shows that OBTC’s discount rate relative to Bitcoin has hovered around 3% to 5% over the past month. Bitwise’s BITB trades much closer to Bitcoin with a discount or premium near 0% relative to NAV. Since its launch seven months ago, Bitwise has seen $2 billion in investor funds flow into its spot Bitcoin ETF. It charges a much lower management fee of 0.20%. However, its performance still pales in comparison to BlackRock’s iShares Bitcoin Trust (IBIT), which has attracted approximately $21 billion in investor funds since January.
Data and Metrics
According to data from Barchart and Yahoo Finance, long-term investors in OBTC may have noticed that the trust’s three-year return is currently around 9.5%, while Bitcoin’s return over the same period is 23.5%.
Bitwise's acquisition of Osprey Bitcoin Trust assets marks a notable development in the ETF sector and underscores the opportunities available to OBTC unit holders through Bitwise's scale and expertise.
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