United States-based Osprey Funds is gearing up to convert its Bitcoin trust into an ETF after an acquisition deal with Bitwise fell through.
Osprey Funds' Strategic Shift Plans
On January 14, the investment management firm announced its intention to file a Form S-1 with the U.S. Securities and Exchange Commission to convert the Osprey Bitcoin Trust (OBTC) into an ETF. This decision follows the termination of a proposed asset purchase agreement with Bitwise, which was announced in August 2024. The deal aimed to transfer OBTC’s assets to Bitwise’s portfolio but fell through as the regulatory deadline of December 31 passed without necessary approvals, forcing both parties to walk away.
Current State of Osprey Bitcoin Trust
Launched in February 2021, OBTC offers investors exposure to Bitcoin without the complexities of direct investment, such as managing wallets or keys. The fund carries a management fee of 0.49%, making it one of the lowest-cost solutions of its kind. As of January 7, 2025, OBTC managed approximately $186.7 million in assets, with each share representing about 0.000326 Bitcoin.
Growing U.S. ETF Market
If approved, Osprey will join the expanding U.S. ETF market, which now includes 32 Bitcoin ETFs. Of these, 11 spot Bitcoin ETFs collectively manage around $109 billion in assets as of January 15, just a year after the first approval. Franklin Templeton and Hashdex have also launched ETFs offering exposure to Bitcoin and Ether indices, appealing to investors seeking diversified strategies, while Bitwise has proposed an ETF focused on publicly traded companies holding over 1,000 BTC in their corporate treasuries.
If the conversion is approved, this move will enable Osprey Funds to strengthen its presence in the rapidly developing U.S. ETF market. Such actions underscore the growing interest in cryptocurrency ETFs and their role in the modern investment landscape.
