Bitwise Purchases The Osprey Bitcoin Trust (OBTC), Is Now The Fifth Largest Bitcoin ETF Provider In The US

The Bitwise Bitcoin ETF (BITB) announced on Tuesday that it had acquired the Osprey Bitcoin Trust (OBTC)—a smaller competitor holding $120 million in assets.

[BUSINESS WIRE] Bitwise #Bitcoin ETF $BITB Acquires Osprey Bitcoin Trust $OBTC with $120 Million in Assets

— BecauseBitcoin.com (@BecauseBitcoin) August 27, 2024

Joint Statement From The Two Firms: No Changes For Existing BITB Share Holders

Bitwise and Osprey released a joint press release on Tuesday (27 August).

It said, “As part of this transaction, OBTC unitholders will receive shares of BITB as part of a liquidating distribution of OBTC.” It finished by saying, “For existing BITB holders, there will be no changes to their shares or any changes to the operation of BITB.”

Osprey has operated its Bitcoin Trust product since February 2021 with a similar setup to the Grayscale Bitcoin Trust before its conversion into an ETF product.

While the fund passively invested its assets in BTC, shares of the fund could see their price trade at a premium or discount to its underlying BTC holdings. This meant that the shares weren’t as closely tied to the price of Bitcoin.

RELATED: Bitwise Acquires ETC Group, A London-Based Crypto ETP Issuer

However, with OBTC investors soon to convert their holdings to BITB, the price of Bitcoin will be closer to that of the Bitwise ETF. The Bitwise ETF offers a smaller management fee than Osprey, 0.2% compared to 0.49%.

Osprey said in the press release, “This announcement follows Osprey’s prior communication regarding the consideration of a potential sale or merger of the Trust”.

It added, “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 Is The Fifth Largest Spot Bitcoin ETF On The Market

Bitwise was one of nine spot Bitcoin ETFs launched back in January. Other notable names that launched alongside Bitwise include BlackRock and Fidelity.

Despite fierce competition, BITB has enjoyed billions of dollars of inflows. It currently holds around $2.4 billion in assets, making it the fifth-largest Bitcoin spot ETF in the US.

This acquisition of Osprey isn’t the firm’s first purchase of a competitor.  Last week , the firm announced that it had acquired London-based crypto ETP firm ETC Group. This was part of a broader plan to expand its suite of crypto ETP products into the European market.

We’re excited to share that Bitwise has acquired ETC Group, the London-based digital asset manager and creator of Europe’s largest physical Bitcoin ETP (BTCE). The acquisition deepens our industry-leading suite of crypto products and brings Bitwise clients access to global… pic.twitter.com/RTSrrokBo3

— Bitwise (@BitwiseInvest) August 19, 2024

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.