Bitwise to Acquire Osprey Bitcoin Trust Assets, Offering OBTC Unitholders Shares of BITB

Bitwise Asset Management has announced the acquisition of the Osprey Bitcoin Trust (OBTC).

According to a Tuesday press release, Bitwise is poised to integrate Osprey’s $120 million in assets under its own Bitwise Bitcoin ETF (BITB), marking a consolidation within the Bitcoin exchange-traded fund (ETF) market.

As part of the transaction, OBTC unitholders will receive BITB shares in a liquidating distribution.

Nothing Changes For Existing BITB Holders

Bitwise emphasized that existing BITB holders will not experience any changes to their shares or the fund’s operations.

Osprey has been operating its Bitcoin Trust since February 2021, mirroring the structure of the Grayscale Bitcoin Trust before its transition to an ETF.

However, unlike direct Bitcoin investments, OBTC shares could trade at premiums or discounts to the underlying Bitcoin holdings, leading to price discrepancies from the actual Bitcoin market.

Recent data shows that OBTC shares have declined by 4.27% over the past month, while Bitcoin’s price has dropped by 9.34%.

In contrast, BITB has experienced a smaller decrease of 8.56%, reflecting its closer alignment with Bitcoin’s price movements.

The transition to BITB offers OBTC unitholders the advantages of tighter tracking and a reduced management fee of 0.2%, compared to OBTC’s 0.49%.

Osprey acknowledged the acquisition as a pivotal step in its previously announced consideration of a potential sale or merger of the trust.

“This announcement follows Osprey’s prior communication regarding… the consideration of a potential sale or merger of the Trust,” Osprey wrote.

“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.”

Launched in January, BITB is part of a competitive market that includes heavyweights like BlackRock and Fidelity.

Despite the competition, BITB has attracted substantial inflows, currently managing $2.4 billion in assets, making it the fifth-largest Bitcoin spot ETF in the United States.

The acquisition follows Bitwise’s recent purchase of ETC Group, expanding its presence in the European market and bringing its total assets under management to $4.5 billion.

Spot Bitcoin ETFs See Outflows

On Tuesday, U.S. spot Bitcoin ETFs experienced net outflows, breaking an eight-day streak of positive inflows, according to data from SoSoValue.

During this period, the funds had accumulated $756 million in inflows.

The U.S. spot bitcoin ETFs reported $127 million in net outflows, with Valkyrie’s BRRR fund data not yet updated.

Ark & 21Shares’ ARKB led the outflows with $101.97 million in negative flows, as reported by SoSoValue.

Grayscale’s GBTC fund saw net outflows of $18.32 million, while Bitwise’s BITB recorded $6.76 million in outflows.

Eight funds, including BlackRock’s IBIT, reported no activity on Tuesday.

Excluding BRRR, the total trade volume for U.S. spot bitcoin funds reached $1.2 billion.

Since January, these funds have garnered $17.95 billion in net inflows.

In contrast, spot ether ETFs continued their ninth consecutive day of net outflows, reporting $3.45 million in negative flows on Tuesday.

Grayscale’s ether fund posted a daily net outflow of $9.18 million, partially offset by $3.88 million in net inflows into Fidelity’s FETH and $1.86 million into Bitwise’s ETHW.

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