Bitwise Expands Bitcoin ETF Through $120 Million Trust Purchase

The recent acquisition of the Osprey Bitcoin Trust (OBTC) by the Bitwise Bitcoin ETF (BITB) was announced on Tuesday. The Osprey Bitcoin Trust, a smaller competitor with $120 million in assets, will now be under the ownership of BITB. In a press release, Osprey and Bitwise stated that OBTC unitholders will receive shares of BITB as part of a liquidating distribution, with no changes for existing BITB holders.

Osprey has been operating its Bitcoin Trust product since February 2021, following a structure similar to the Grayscale Bitcoin Trust before its transformation into an ETF. While the fund passively invested in BTC, the price of its shares could vary from Bitcoin’s price, trading at a premium or discount to its underlying BTC holdings.

For instance, recent data from Google finance shows that OBTC shares have decreased by 4.27% in the past month, while Bitcoin’s price dropped by 9.34%. In comparison, the Bitwise Bitcoin ETF has experienced an 8.56% decline, aligning more closely with the underlying asset.

With OBTC investors transitioning to BITB, they can expect tighter tracking and a reduced management fee of 0.2% compared to 0.49%. This move follows Osprey’s prior communication about considering a sale or merger of the Trust, with the acquisition by Bitwise offering OBTC unitholders the chance to benefit from Bitwise’s scale and expertise.

Bitwise introduced its Bitcoin ETF in January alongside nine other competitors, including industry giants like BlackRock and Fidelity, as well as a revamped Grayscale. Despite intense competition, BITB has attracted billions in inflows and now holds $2.4 billion in assets, ranking as the fifth-largest Bitcoin spot ETF in the US.

In a separate development, Bitwise recently expanded its presence in Europe by acquiring ETC Group, broadening its range of crypto ETP products in the European market. This acquisition is expected to increase Bitwise’s assets under management (AUM) to $4.5 billion.

The acquisition of OBTC by BITB signifies a significant development in the cryptocurrency investment landscape, offering investors enhanced opportunities for exposure to Bitcoin within a regulated ETF framework.