Osprey Funds has announced its intention to transition the Osprey Bitcoin Trust (OBTC) into an exchange-traded fund (ETF) following the cancellation of an acquisition deal with Bitwise Asset Management. In a recent statement, the firm indicated plans to file a Form S-1 registration statement with the U.S. Securities and Exchange Commission in the near future.
Previously, OBTC had been a competitor to the more extensive Grayscale Bitcoin Trust, which successfully converted to a spot Bitcoin ETF in January 2024. The Osprey Trust currently tracks the price of Bitcoin (BTC) without actually holding the cryptocurrency itself and manages approximately $181 million in assets.
The acquisition agreement, announced in August 2023, fell through after the parties involved failed to secure all necessary regulatory approvals by the established deadline of December 31, 2024. Osprey Funds confirmed that the deal’s termination was due to this lack of approvals.
The landscape for Bitcoin ETFs is rapidly evolving, particularly after the U.S. Securities and Exchange Commission approved Bitcoin and Ether index ETFs from Hashdex and Franklin Templeton late last year. Currently, there are 32 Bitcoin ETFs trading in the U.S., though only 11 of these are classified as spot Bitcoin ETFs.
In the most recent trading session, Osprey’s OBTC saw a 3% increase, reaching $29.84, and has surged over 151% in value over the past year. However, it remains below its peak of $50, which occurred shortly after the trust commenced trading in February 2021.
The firm, headquartered in Fairfield, Connecticut, began trading OBTC on the OTC market in early 2021. Osprey has been engaged in legal action against Grayscale, alleging misconduct regarding promotional strategies that allegedly permitted Grayscale to dominate the Bitcoin trust market. As of March, the firm also indicated it was exploring options for the trust, including potential sale or liquidation due to trading at a discount relative to Bitcoin ’s actual market value.
