 Osprey Funds to seek SEC approval to convert Bitcoin trust into ETF 
2025-01-15
Category: None

Investment management firm Osprey Funds has flagged a plan to convert its Osprey Bitcoin Trust (OBTC) into an exchange-traded fund (ETF) after the deal to be acquired by Bitwise was terminated.
In a Jan. 14 statement, the firm said it will file a Form S-1 containing a registration statement with the US Securities and Exchange Commission “as soon as practicable.”
OBTC was once a competitor to the much larger Grayscale Bitcoin Trust before GBTC eventually converted to a spot Bitcoin ETF in January 2024.
According to the OBTC description, the fund currently tracks the price of Bitcoin BTCUSD without holding the actual asset and has $181 million in assets under management (AUM).
It comes as Osprey said the deal for  Bitwise Asset Management to acquire the assets of OBTC — announced in August — has been scuttled. 
In a statement, Osprey Funds said the deal was “terminated” after the parties involved didn’t receive all the necessary regulatory approvals by Dec. 31, 2024.
It comes as more firms move into the ETF market, with the SEC giving the green light to Hashdex and Franklin Templeton’s respective Bitcoin and Ether index ETFs on Dec. 20 last year, and huge gains in the spot Bitcoin ETF market. 
According to analytics and global ETF database service VettaFi, 32 different Bitcoin ETFs are currently traded in the US. However, only 11 are spot Bitcoin ETFs. 
Osprey’s announcement came after the close of the stock market, but its unit price of OBTC was up 3% to $29.84 in the last trading session and up over 151% in the last year, according to Google Finance. 
However, it’s still down from its all-time high of $50, which it opened at on Feb. 12, 2021, when the trust went live.
Osprey Funds, based in Fairfield, Connecticut, began trading its OBTC on the OTC market in February 2021. 
Osprey sued Grayscale in January 2023, claiming the asset manager’s misleading advertising and promotion around the likelihood of its trust becoming an ETF allowed it to take a monopoly share in the Bitcoin OTC trust asset market. The suit is still ongoing. 
In March, the firm said it had begun considering a potential sale or liquidation of the trust after it found that units were trading at a discount to the value of Bitcoin. 