Bitwise to Purchase Osprey Funds’ Bitcoin Trust Assets

Bitwise, a prominent crypto index fund manager in the United States, has announced its plans to acquire the assets of Osprey Bitcoin Trust, a move that signals a significant development in the crypto investment landscape.

The acquisition deal, revealed in a press release on August 27, involves Bitwise entering into an asset purchase agreement with Osprey Funds to take over the assets of the Osprey Bitcoin Trust. While specific financial terms of the transaction were not disclosed, it was disclosed that OBTC unitholders will receive BITB shares as part of a liquidating distribution, with no anticipated changes for existing BITB holders. As of August 26, data from Osprey Funds’ official website indicated that the trust held assets worth over $123 million.

Importantly, the transaction is structured to be tax-free for OBTC unitholders under U.S. federal income tax laws. Further details regarding the acquisition will be outlined in a registration statement to be submitted to the Securities and Exchange Commission. The primary objective of the acquisition is to provide OBTC unitholders with a similar exposure to bitcoin through BITB, with the transaction expected to be finalized later this year, subject to customary closing conditions.

This acquisition follows Osprey Funds’ prior announcement of exploring strategic alternatives to enhance unitholder value, including potential sales or mergers of the Trust.

Osprey has described the collaboration with Bitwise as a “significant step” forward, emphasizing that the acquisition will enable OBTC unitholders to leverage the scale and expertise of Bitwise for their benefit. Notably, Bitwise has been expanding its presence, including its recent foray into the European market through the acquisition of ETC Group, a London-based crypto exchange-traded product issuer managing assets exceeding $1 billion. This strategic move added nine European-listed crypto ETPs to Bitwise’s portfolio, marking a noteworthy milestone in its global expansion efforts.

Established in 2019, ETC Group is renowned for its physical Bitcoin ETP and other innovative products. Bitwise intends to rebrand all ETC Group offerings under its own name, with no significant changes anticipated in the existing investment strategies.

The acquisition of Osprey Bitcoin Trust’s assets by Bitwise underscores the dynamic nature of the crypto investment sector, as key players seek to enhance their market positions and offer enhanced value propositions to investors.