Bitwise Asset Management has purchased the Osprey Bitcoin Trust (OBTC), in a major development in the Bitcoin ETF market. The acquisition will transfer Osprey’s $120 million assets to the Bitwise Bitcoin ETF (BITB). Therefore, OBTC unitholders will get BITB shares, a strategic move for the two companies.
Bitwise Acquires OBTC, Expands ETF Offerings
The shareholders of OBTC will automatically become shareholders of BITB as a result of the acquisition. This change allows unitholders to track the price of Bitcoin and a lower management fee of 0.2% compared to OBTC’s 0.49%.
Bitwise stated that existing BITB holders would not see any share or fund management changes. Osprey’s Bitcoin Trust, launched in February 2021, was similar to the Grayscale Bitcoin Trust before it was transformed into an ETF.
However, the shares of OBTC are traded at premiums or discounts to the actual Bitcoin, which affects the price. BITB resolves these challenges, providing investors a more accurate tracking system and stability.
Bitwise Now Fifth-Largest Bitcoin Spot ETF
BITB, which started operations in January this year, now controls $2.4 billion in assets, making it the fifth-largest Bitcoin spot ETF in the United States.
The acquisition of ETC Group by Bitwise also helped the company strengthen its position in the European market and increase its assets under management to $4.5 billion. This growth trajectory shows that Bitwise has adopted the acquisition strategy to cement its position in the global ETF market.
Osprey had identified the acquisition as strategic in its earlier announced plans to explore a sale or merger of the company.
US Bitcoin ETFs See End to Inflows
As for the day of the announcement, U.S. spot Bitcoin ETFs recorded net outflows, which, in turn, marked the end of the eight-day inflows trend. Interestingly, Bitwise’s BITB saw $6.76 million in outflows, while other large funds like Grayscale’s GBTC and Ark & 21Shares’ ARKB also witnessed large outflows.
Nonetheless, the total trading volume for US spot Bitcoin funds remained at $1.2 billion, which shows the continued investments made by investors. This comes after U.S. spot Bitcoin ETFs have registered net inflows of $17.95 billion since January, which underpins the sector’s growth.
However, spot Ether ETFs kept the trend of outflows going, with $3.45mln in redemptions recorded on the same day. This divergence in trend between Bitcoin and Ether ETFs indicates the difference in investor perception of cryptocurrencies.
The purchase of Osprey’s Bitcoin Trust aligns with Bitwise’s general growth plan through business acquisition. OBTC’s assets contribute to the growth of Bitwise’s product portfolio, and the company’s mission is to offer investors the most convenient and affordable means to tap into Bitcoin.
BITB has a lower management fee and better tracking than its counterpart, which may lead to more investors and an increase in the fund’s market share.
