U.S.-based asset management firm Osprey Funds announced its intention to convert its Osprey Bitcoin Trust (OBTC) into an exchange-traded fund (ETF) following the collapse of the Bitwise deal.
Osprey Funds' Plans for ETF Conversion
On January 14, the firm announced its intention to file a Form S-1 with the U.S. Securities and Exchange Commission to transform the Osprey Bitcoin Trust (OBTC) into an exchange-traded fund (ETF). Launched in February 2021, OBTC provides investors with a straightforward way to gain Bitcoin exposure without the need for managing wallets or keys, with a management fee of just 0.49%, making it one of the most cost-effective options in its category.
Cancellation of Bitwise Deal
The move to convert OBTC into an ETF follows the cancellation of a planned asset acquisition deal with Bitwise. Osprey Funds and Bitwise had announced an Asset Purchase Agreement, allowing Bitwise to acquire the assets of the Osprey Bitcoin Trust (OBTC). As part of the deal, OBTC unitholders would receive shares of the Bitwise Bitcoin ETF (BITB) through a liquidating distribution, while existing BITB holders would see no changes to their shares or the ETF’s operations. The transaction was intended to be tax-free for OBTC unitholders, but it fell through as the December 31 regulatory deadline passed without the necessary approvals, causing both parties to walk away.
New ETF Development from Calamos Investments
In another ETF-related development, Calamos Investments has launched the world's first 100% downside-protected Bitcoin ETF, named CBOJ. Set to list on the CBOE on January 22, 2025, CBOJ offers regulated Bitcoin exposure with built-in risk protection using Treasuries and options tied to the CBOE Bitcoin US ETF Index. The ETF has a 0.69% annual expense ratio and resets annually to adjust its upside cap and downside protection. It targets investors seeking Bitcoin exposure without volatility risks. CEO John Koudounis and Head of ETFs Matt Kaufman emphasized its appeal to diverse investors.
The conversion of the Osprey Bitcoin Trust into an ETF highlights a strategic shift for the company following the termination of the deal with Bitwise, while the launch of a downside-protected Bitcoin ETF by Calamos Investments underscores the growing interest in such financial products.
