Osprey Fund’s bitcoin trust opens its services to retail investors via the OTC [Over-the-Counter] market.
The fund was formed 2 years ago, and Osprey applied to register the trust with the United States SEC [Securities and Exchange Commission] somewhere within the middle of last year, added Osprey CEO, Greg King.
It joins a crop of Bitcoin [BTC, +2.78%] funds aimed squarely at the market-leading Grayscale Bitcoin Trust [GBTC] prior to a bitcoin ETF is further approved by the SEC. This embodies offerings from Bitwise Asset Management, BlockFi, and CrossTower that aim to offer traditional investors exposure to bitcoin without having to touch the asset itself.
Formed alike to GBTC, the Osprey fund has nearly $80 Mln in assets under management [AUM] and might be accessed directly by accredited investors & indirectly by retail investors via OTC trading desks.
Osprey boasts a 0.49% management fee compared to GBTC’s 2% annual fee, but the fund also has 0.3% in other expenses from services along with cryptocurrency custody. King added that he doesn’t expect those extra expenses to stay around, however.
“We expect those costs will go down both over time and as AUM grows,” King explained. “Custody costs have gone down significantly over the past few years as well as those changes happening to those savings will flow on to investors.”
This fee structure makes the fund cheaper than GBTC but costlier than other new funds like CrossTower’s master-feeder bitcoin fund, which indeed features a 0.6% management fee that encompasses other fees.
Fidelity Digital Assets is the custodian for the Osprey fund, Grant Thornton is among the auditor & CoinMetrics is the mentioned index provider.
If the SEC approved bitcoin ETFs, then the worth of funds like Osprey and GBTC could diminish significantly. Therein case, Osprey would “look very closely at converting” to an ETF structure, King explained.