A cryptocurrency-focused index fund firm's team is making acquisitions on both sides of the pond.

Matthew "Matt" Hougan Bitwise Asset Management Chief Investment Officer Officer

Last week, the folks at San Francisco-based Bitwise Asset Management and Fairfield, Connecticut-based Osprey Funds, LLC unveiled a deal for the Bitwise Bitcoin ETF (BITB on the NYSE Arca) to buy the assets of Osprey's flagship fund, the Osprey Bitcoin Trust (OBTC). And about a week earlier, Bitwise CEO Hunter Horsley and ETC Group co-founder Bradley Duke unveiled a deal for Bitwise to buy London-based ETC.

The Bitwise-Osprey deal is expected to close later in 2024. News of the deal comes less than six months afte the Osprey team publicly revealed that they were "exploring strategic alternatives" for OBTC, including a potential sale or fund merger.

"There are a variety of regulatory steps required to bring OBTC fully into BITB," Matt Hougan, chief investment officer of Bitwise, told ETF.com. "We do not have an exact timeline but are pushing to close the acquistion as quickly as possible."

OBTC and BITB are both Delaware statutory trusts, not mutual funds. Yet BITB is also an exchange-traded product (ETP), one of the first batch of spot bitcoin ETPs to debut earlier this year. (Perhaps the birth of spot bitcoin ETPs like BITB contributed to Osprey's search for strategic alternatives for OBTC.) As of yesterday, BITB had $2.042 billion in AUM, while OBTC had $109 million.

The Osprey-Bitwise deal would mean lower fees for investors in OBTC. The fund's management fee is 49 basis points, while BITB's sponsor fee is 20bps.

As for ETC, the deal brings Bitwise into Europe with a nine-ETP business with more than $1 billion in AUM. That would boost Bitwise to more than $4.5 billion in AUM in total.

"Bitwise is building a global crypto asset manager for investors and financial advisors who want a best-in-class partner specialized in this fast-growing asset class," Horsley stated. "This acquisition allows us to serve European investors, to offer clients global insight, and to expand the product suite with innovative ETPs."

"Bitwise is bulding the best-of-breed firm for this new asset class," Duke states. "We couldn't be more excited to continue our work in Europe as part of Bitwise." 

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