Bitwise Bitcoin ETF (BITB) Acquires Osprey Bitcoin Trust (OBTC)

The deal, revealed in a joint statement on Tuesday, will see OBTC investors receiving BITB shares as part of its liquidating distribution.

Bitwise, the company behind the first U.S. Bitcoin exchange-traded fund (ETF), is merging Osprey Bitcoin Trust (OBTC) into its fund, according to a joint statement on Tuesday.

As part of the deal, OBTC investors will receive shares of the Bitwise ETF (BITB) in a liquidating distribution.

Osprey, a smaller competitor in the Bitcoin ETF market, had about $120 million in assets under management.

The merger will see OBTC investors paying lower fees (0.2% with BITB versus 0.49% with OBTC) and will benefit from BITB's more accurate tracking of the Bitcoin price.

While BITB shares tend to follow Bitcoin's value more closely, OBTC investors have seen their shares drift away from the cryptocurrency's actual price at times.

For instance, over the past month, OBTC shares dropped by 4.27%, while Bitcoin fell by 9.34%. Meanwhile, BITB was down 8.56%, showing a closer alignment with Bitcoin's price movements.

The acquisition is part of a broader effort by Bitwise to expand its presence in the competitive Bitcoin ETF market, where it competes with large players like BlackRock, Fidelity and Grayscale.

Recently, Bitwise also expanded into Europe by acquiring the London-based ETC Group, which offers similar crypto investment products.

The expansion brings Bitwise's total assets under management to $4.5 billion, further establishing its presence in the global crypto market.