Osprey Bitcoin Trust seeks merger or sale with existing bitcoin ETF

Before Grayscale converted its trust, Osprey’s trust was a competitor

March 5, 2024 01:34 pm

Osprey Funds and Adobe Stock modified by Blockworks

Osprey Bitcoin Trust (OBTC) warned Tuesday that it needs to either sell the Trust or merge with an existing bitcoin ETF.

“As part of the strategic process, the Sponsor plans to consider a wide range of options, and is in various discussions about a potential sale of the Trust to, or merger with, an existing Bitcoin ETF,” the Trust said in a statement.

However, “in the event such talks do not conclude positively, the Sponsor intends to liquidate and dissolve the Trust within 180 days from today,” it continued.

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The decision to seek “strategic alternatives” came after the Trust said it was “aware that the common units of fractional undivided beneficial interest of the Trust are trading at a discount to the value of Bitcoin.”

The Trust will file a Form 15 with the Securities and Exchange Commission to deregister.

Last January, Osprey looked into taking over management of Grayscale’s bitcoin trust. The trust, which is still managed by Grayscale, was one of a handful of bitcoin ETFs to launch in January.

Prior to the conversion of Grayscale’s fund, Osprey’s Trust was a competitor to GBTC.

At the end of January last year, the trust’s parent company even launched a lawsuit against Grayscale. Osprey claimed that Grayscale misled investors by engaging in “deceptive acts and unfair competition.”

At the time, Grayscale had recently launched its suit against the SEC after the agency blocked GBTC’s first conversion.

In August of last year, a court sided with Grayscale and ordered the SEC to once again consider GBTC’s application to convert to an ETF. In January of this year, the SEC voted to greenlight the spot bitcoin ETFs.

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