Key Takeaways
- Bitwise will acquire $120 million from Osprey Bitcoin Trust.
- OBTC unitholders will receive BITB shares in exchange.
- OBTC underperformed Bitcoin, with a 9.5% return over three years.
Bitwise Asset Management is set to absorb the assets of the Osprey Bitcoin Trust (OBTC), adding $120 million worth of Bitcoin to its Bitcoin ETF (BITB).
The deal was announced on Aug. 27, following a joint statement from Bitwise and Osprey Funds.
The acquisition is part of an asset purchase agreement, with OBTC unitholders exchanging their shares for BITB units. The transaction is expected to close later this year, pending standard closing conditions.
OBTC
OBTC, which has been trading on the OTC market since February 2021, was initially positioned as a competitor to the Grayscale Bitcoin Trust.
However, in early 2023, Osprey sued Grayscale, accusing it of monopolizing the market through misleading advertising.
By March, Osprey began exploring strategic options, including a sale or liquidation, as its shares were trading at a discount to Bitcoin.
Greg King, CEO of Osprey Funds, explained:
We wanted a solution that worked for all, and this seems to be the best option.
OBTC’s assets under management currently stand at $120.7 million, but the trust has underperformed Bitcoin, showing a three-year return of 9.5% compared to Bitcoin’s 23.5%.
In contrast, Bitwise’s Bitcoin ETF charges a lower 0.20% management fee and has attracted $2 billion since its launch, though it lags behind BlackRock’s $21 billion iShares Bitcoin Trust.
