Bitwise Asset Management has announced its acquisition of the Osprey Bitcoin Trust (OBTC), integrating Osprey’s $120 million in assets into its Bitwise Bitcoin ETF (BITB). The deal, revealed in a Tuesday press release, signifies a notable consolidation within the Bitcoin exchange-traded fund (ETF) sector.

Under the terms of the transaction, OBTC unitholders will receive shares of BITB as part of a liquidating distribution. Existing holders of BITB will not see any changes to their shares or the ETF’s operations.

Osprey, which launched its Bitcoin Trust in February 2021, has operated with a structure similar to the Grayscale Bitcoin Trust before it became an ETF. Unlike direct Bitcoin investments, OBTC shares have traded at varying premiums or discounts relative to the underlying Bitcoin, leading to price discrepancies.

#Bitwise #Bitcoin #ETF (#BITB) is set to acquire $120 million in Bitcoin from the #Osprey Bitcoin #Trust (#OBTC) as part of an Asset Purchase Agreement.

OBTC unitholders will receive BITB shares in exchange, with the transaction expected to close later this year.

This move… pic.twitter.com/zqI03AMrAx

— TOBTC (@_TOBTC) August 28, 2024

Recent performance data indicates that OBTC shares have fallen by 4.27% over the past month, while Bitcoin’s price has dropped by 9.34%. In contrast, BITB has seen a smaller decrease of 8.56%, showing closer alignment with Bitcoin’s price movements. The transition to BITB will offer OBTC unitholders tighter tracking of Bitcoin’s price and a lower management fee of 0.2%, compared to OBTC’s 0.49%.

Osprey has recognized the acquisition as a significant move in its exploration of a potential sale or merger of the Trust. “This announcement follows Osprey’s prior communication regarding the consideration of a potential sale or merger,” the company stated. “The acquisition by Bitwise represents a significant step in that process, providing OBTC unitholders the chance to benefit from Bitwise’s scale and expertise.”

BITB, which launched in January, is competing in a market with major players like BlackRock and Fidelity. Despite the competitive landscape, BITB has attracted significant inflows, managing $2.4 billion in assets and becoming the fifth-largest Bitcoin spot ETF in the U.S. The acquisition follows Bitwise’s recent purchase of ETC Group, boosting its total assets under management to $4.5 billion.

On the same day, U.S. spot Bitcoin ETFs experienced net outflows, ending an eight-day streak of positive inflows, according to SoSoValue. These funds had previously accumulated $756 million in inflows. On Tuesday, the U.S. spot Bitcoin ETFs reported $127 million in net outflows.

The Valkyrie BRRR fund’s data was not updated, but Ark & 21Shares’ ARKB led with $101.97 million in outflows, while Grayscale’s GBTC saw $18.32 million in outflows. Bitwise’s BITB recorded $6.76 million in outflows. Eight funds, including BlackRock’s IBIT, reported no activity. Excluding BRRR, total trade volume for U.S. spot Bitcoin funds was $1.2 billion. Since January, these funds have accumulated $17.95 billion in net inflows.

On August 27, the total net outflow of Ethereum spot ETF was $3.4452 million, and it has been outflowing for nine consecutive days. Grayscale ETF ETHE had a net outflow of $9.1798 million in a single day, Fidelity ETF FETH had an inflow of $3.8792 million, and Bitwise ETF ETHW…

— Wu Blockchain (@WuBlockchain) August 28, 2024

In contrast, spot ether ETFs continued to experience outflows for the ninth consecutive day, with a reported $3.45 million in negative flows. Grayscale’s ether fund posted a daily net outflow of $9.18 million, partially offset by $3.88 million in inflows into Fidelity’s FETH and $1.86 million into Bitwise’s ETHW.

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