Bitwise Asset Management has announced its acquisition of the Osprey Bitcoin Trust (OBTC), consolidating its position in the Bitcoin exchange-traded fund (ETF) market. The deal, disclosed in a press release on Tuesday, involves integrating Osprey’s $120 million in assets into Bitwise’s own Bitcoin ETF (BITB).
Details of the Acquisition
Under the terms of the acquisition, OBTC unitholders will receive shares of BITB through a liquidating distribution. Bitwise assured existing BITB holders that there would be no changes to their shares or the fund’s operations as a result of the acquisition.
Osprey Bitcoin Trust, which launched in February 2021, was structured similarly to the Grayscale Bitcoin Trust before transitioning to an ETF. OBTC shares, however, have sometimes traded at premiums or discounts relative to the underlying Bitcoin holdings, leading to price discrepancies. Recent data shows OBTC shares have fallen by 4.27% in the past month, compared to a 9.34% decline in Bitcoin’s price. BITB, in contrast, has seen a smaller drop of 8.56%, reflecting a closer alignment with Bitcoin’s price.
Advantages for OBTC Unitholders
The transition to BITB provides OBTC unitholders with benefits including tighter tracking of Bitcoin’s price and a lower management fee of 0.2%, compared to OBTC’s 0.49%. Osprey has recognized the acquisition as a significant move in its strategic review of a potential sale or merger of the Trust.
BITB, which launched in January, is a notable player in the competitive Bitcoin ETF market, alongside major names like BlackRock and Fidelity. Despite fierce competition, BITB has attracted considerable inflows, currently managing $2.4 billion in assets, making it the fifth-largest Bitcoin spot ETF in the U.S.
Broader Market Impact
The acquisition follows Bitwise’s recent purchase of ETC Group, boosting its total assets under management to $4.5 billion. This expansion underscores Bitwise’s growing influence in both U.S. and European markets.In related news, U.S. spot Bitcoin ETFs reported net outflows on Tuesday, ending an eight-day streak of positive inflows. According to SoSoValue, U.S. spot Bitcoin ETFs saw $127 million in net outflows, with notable outflows from Ark & 21Shares’ ARKB and Grayscale’s GBTC. Bitwise’s BITB recorded $6.76 million in outflows. Despite these outflows, spot Bitcoin ETFs have accumulated $17.95 billion in net inflows since January.
Conversely, spot ether ETFs continued their streak of net outflows, with $3.45 million in negative flows on Tuesday. Grayscale’s ether fund experienced a daily net outflow of $9.18 million, although Fidelity’s FETH and Bitwise’s ETHW partially offset this with small net inflows.
The acquisition of Osprey Bitcoin Trust by Bitwise marks a strategic consolidation in the Bitcoin ETF market, enhancing Bitwise’s position and offering OBTC unitholders valuable benefits.
August 2024, Cryptoniteuae