The Osprey Bitcoin Trust, or OBTC, would be converted into a spot Bitcoin ETF. The company made an announcement after its sale proposal to Bitwise Asset Management flopped. More companies have started launching Bitcoin ETFs lately. So, this is a big change for Osprey and its investors
An Overview of Osprey Bitcoin Trust (OBTC)
Launched in February 2021, Osprey Bitcoin Trust, or OBTC, is one type of instrument where access to Bitcoin will not be demanded for one to possess it. Since the investors merely track the Bitcoin price passively, conventional investors now can also engage themselves within the cryptocurrency markets with greater ease.
Assets reached $181 million but still did not keep up with bigger funds like Grayscale's Bitcoin Trust, GBTC, which converted into a spot Bitcoin ETF in 2024. OBTC now trades at a discount to the price of Bitcoin, and Osprey is reviewing its strategy.
Osprey’s change to a Spot Bitcoin ETF
On January 14, 2025, Osprey Funds plans to file a Form S-1 with the SEC. In an effort to shift the OBTC from a spot bitcoin ETF. Bitwise's attempt to buy Osprey in 2024 failed as it could not gain the regulatory approvals required.
Osprey CEO Greg King said a Bitcoin ETF is the best way to grow going forward. This follows the SEC approving Bitcoin ETFs by Hashdex and Franklin Templeton towards the end of 2024.
Increasing demand for bitcoin ETFs
Bitcoin ETFs are rapidly increasing; there are now 32 Bitcoin ETFs traded in the US, 11 of which use direct spot monitoring for pricing. Growing demands for such accessible and regulated investments in bitcoin attract Osprey to exchange in order to switch its active cryptocurrency fund to become an ETF.
Impact on OBTC Investors and the Future of Bitcoin ETFs
This may bring OBTC into an operational spot Bitcoin ETF, allowing the conversion of it into an active spot with much better efficiency, transparency, and liquidity than with a trust. That might even alleviate the discount the OBTC has been taking on Bitcoin. It is uncertain what the timeline of the conversion would be without approval from the SEC. As the market for Bitcoin ETFs continues to expand, this decision by Osprey provides investors with an exciting opportunity for regulated, direct access to investing in Bitcoin. To take advantage of long-term growth in this market, those investors will need to keep up with news on Bitcoin ETFs.
