Bitwise Grows Bitcoin ETF With $120 Million Trust Acquisition

The Bitwise Bitcoin ETF (BITB) announced on Tuesday that it has acquired the Osprey Bitcoin Trust (OBTC)—a smaller competitor holding $120 million in assets.

“As part of this transaction, OBTC unitholders will receive shares of BITB as part of a liquidating distribution of OBTC,” said Osprey and Bitwise in a Tuesday press release. “For existing BITB holders, there will be no changes to their shares or any changes to the operation of BITB.”

Osprey has operated its Bitcoin Trust product since February 2021 with a structure similar to the Grayscale Bitcoin Trust prior to its conversion into an ETF product. While the fund passively invested its assets in BTC, shares of the fund could see their price trade at a premium or discount to its underlying BTC holdings, and therefore diverge from Bitcoin’s price.

For example, Google finance data shows that shares in OBTC have been down 4.27% over the past month, while the price of Bitcoin itself has been down 9.34%. Meanwhile, the Bitwise Bitcoin ETF is down 8.56%, more closely following the underlying asset.

With OBTC investors soon to convert their holdings to BITB, they will experience tighter tracking and a smaller management fee: 0.2% compared to 0.49%.

“This announcement follows Osprey’s prior communication regarding… the consideration of a potential sale or merger of the Trust,” Osprey wrote. “The acquisition by Bitwise represents a significant step in that process, offering OBTC unitholders the opportunity to benefit from the scale and expertise of Bitwise.”

Bitwise launched its Bitcoin ETF alongside nine other competitors in January including BlackRock, Fidelity, and a newly converted Grayscale. Despite fierce competition, BITB has enjoyed billions of dollars of inflows and now boasts $2.4 billion in assets, making it the fifth largest Bitcoin spot ETF in the United States.

Last week, Bitwise also announced that it had acquired ETC Group, expanding its suite of crypto ETP products into the European market. Bitwise said at the time that the acquisition would bring its assets under management (AUM) up to $4.5 billion.

Edited by Ryan Ozawa.