Osprey Funds, a closed-end Bitcoin investment firm, is finalizing an Asset Purchase Agreement with Bitwise Asset Management. The deal entails that Bitwise Bitcoin Exchange Trust Fund (ETF) BITB receives $120 million in Bitcoin (BTC) through an agreement to acquire assets from Osprey Bitcoin Trust (OBTC).
Osprey Funds Merge with Bitcoin ETF
This deal comes as Osprey Fund is on the verge of liquidating its assets due to low returns on its digital investment product. On August 27, the two firms jointly announced this acquisition deal, slated to close later this year, pending closing conditions. As part of the deal, OBTC unit holders will receive BITB shares upon selling their OBTC shares.
Competition with Grayscale
Osprey Funds and Grayscale Bitcoin Trust (GBTC) were once rivals in the digital market. Both offered Bitcoin trusts to investors in the Over-the-Counter Market (OTC) before GBTC switched its investment offerings to a spot Bitcoin ETF. When OBTC was introduced in 2021, it was hailed as the most budget-friendly choice for entering Bitcoin, due to its 0.49% management fee.
Growth of Bitwise Investment Funds
Bitwise’s spot Bitcoin ETF has witnessed a significant $2 billion influx of investor funds within the past seven months. It offers a lower management fee of 0.20%. BITB has been trading in close alignment with Bitcoin, with a discount or premium to NAV hovering around 0%.
The deal between Osprey Funds and Bitwise Asset Management opens new opportunities for investors and demonstrates the growing significance of Bitcoin ETFs in the digital asset market.
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