Osprey Funds to Convert Bitcoin Trust into ETF
Osprey Funds, a United States-based investment management firm, is making moves to convert its Bitcoin trust into an exchange-traded fund (ETF) following the collapse of an acquisition deal with Bitwise.
The firm announced on Jan. 14 that it plans to file a Form S-1 with the U.S. Securities and Exchange Commission to convert the Osprey Bitcoin Trust (OBTC) into an ETF. This decision comes after the termination of a proposed asset purchase agreement with Bitwise, which was intended to transfer OBTC’s assets to Bitwise’s portfolio.
Launched in February 2021, OBTC provides investors with exposure to Bitcoin without the complexities of direct investment. With a management fee of 0.49%, it is considered one of the lowest-cost solutions in the market. As of January 7, 2025, OBTC managed approximately $186.7 million in assets, with each share representing about 0.000326 Bitcoin.
The trust began exploring strategic options after trading at a discount to the value of its underlying Bitcoin assets, leading to concerns among shareholders. The termination of the Bitwise deal prompted Osprey to pursue the conversion to an ETF.
If approved, Osprey will join the growing U.S. ETF market, which currently includes 32 Bitcoin ETFs. These ETFs collectively manage around $109 billion in assets as of Jan. 15. Franklin Templeton and Hashdex have also launched ETFs offering exposure to Bitcoin and Ether indices, catering to investors seeking diversified strategies.
Bitwise has proposed an ETF focused on publicly traded companies holding over 1,000 BTC in their corporate treasuries, further expanding the options available to investors in the cryptocurrency market.