Osprey Funds Enters the Market
In an exciting twist in the world of cryptocurrency, Osprey Funds has launched an over-the-counter (OTC) Bitcoin trust under the ticker OBTC. Hot on the heels of the competition, notably Grayscale’s Bitcoin Trust (GBTC), this offering promises to shake things up for both seasoned investors and newcomers alike.
What Makes OBTC Stand Out?
Osprey announces that the Osprey Bitcoin Trust aims to make Bitcoin more accessible. Unlike its pricier relative, GBTC, which charges a hefty 2% management fee, OBTC boasts a remarkably low 0.49% fee. Whether one is looking to dip a toe or dive right into the Bitcoin pool, low fees can certainly sweeten the deal!
How Does It Work?
OBTC first began trading on the OTC market on January 15, which sounds like just another ordinary Friday…except when it’s not! Greg King, the CEO of Osprey Funds, shared that the product met the warrant requirements for this listing a day earlier. The next step? Achieving direct-to-customer (DTC) eligibility within 30 days, allowing additional market makers to quote it after February 14. Talk about making an entrance!
The Competitive Landscape
Grayscale, for those who may not know, is a market heavyweight, currently possessing over 500,000 BTC as of late 2020. Its flagship product, GBTC, allows purchases of Bitcoin represented in share form (each share equivalent to 0.00094 BTC). Although this opens the door for many, it comes with the aforementioned 2% fee. In contrast, Osprey is trying to reel in some of that market share by offering a sexier price point. Can you blame them?
Regulatory Nuances
Osprey’s Bitcoin fund operates under a Reg D SEC exemption, allowing it to bypass some of the restrictions applicable to GBTC. The latter operates under both Reg A and D exemptions, conveniently opening its doors to non-accredited investors. But, before you get too excited, note that there’s a cloud above the rainbow: there are limits on total shares for these investors. So, it seems that hope and bureaucracy will always be intertwined.
Investor Requirements
Quick note for the aspiring wealthy: accredited investors need to pony up a minimum of $25,000 to jump directly into the Osprey trust. There is a one-year lockup period before shares can be sold on the secondary market, although King hinted at a potential reduction of the lockup in the future. Grayscale, in its own right, imposes a shorter six-month wait. Hurry up and wait—that’s the mantra, isn’t it?
Conclusion: A New Wave of Accessibility
The Osprey Bitcoin Trust is stepping up to the plate, ready to make digital currency investment more accessible, especially in the U.S. Whether this low-fee trust can rival the likes of Grayscale remains to be seen, but with all the hype surrounding cryptocurrencies, this market is only getting started. After all, who doesn’t love a bit of friendly competition to fuel innovation?
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