Update Jan. 15, 4:25 am UTC. This article has been updated to include a comment from the CEO of Osprey Funds, Greg King.
Investment management firm Osprey Funds has flagged a plan to convert its Osprey Bitcoin Trust (OBTC) into a spot Bitcoin 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.”
Speaking to Cointelegraph, Greg King, CEO of Osprey Funds, said he expects the S1 form will likely be filed with the SEC before the end of the month.
“We are committed to getting our investors into a Bitcoin ETF. This seems like the surest path at this point,” he said.
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 (BTC) without holding the actual asset and has $181 million in assets under management (AUM).
Source: Greg King
It comes as Osprey said in a statement the deal for Bitwise Asset Management to acquire the assets of OBTC — announced in August — has been scuttled.
According to King, the agreement with Bitwise allowed for a termination of the deal after Dec. 31, 2024, if necessary regulatory approvals were not obtained in that timeframe.
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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.
Shares in Osprey Funds Bitcoin trust have made significant gains in the last year. Source: 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.
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Update Jan. 15, 4:25 am. This article has been updated to include a comment from the CEO of Osprey Funds, Greg King.