Osprey Funds has launched an over-the-counter bitcoin market fund (OTC) that promises to be the product of this kind at the lowest cost. “Osprey Bitcoin Trust offers easy access to bitcoin”, Osprey states on its website. And it adds that with its 0.49% rate, this “is the lowest cost solution”.
In this type of fund, instead of buying bitcoins, having to worry about how custody will be–, the investor acquires shares. These shares will equate to bitcoins fractions and, after a while, the investor can trade them in the over-the-counter market. In OTC, transactions often involve higher amounts and generally do not happen in a broker’s environment.
The new fund should compete with Grayscale’s Bitcoin Trust (GBTC). Although similar, Grayscale’s product has a much higher administration rate: 2%. “Osprey is probably trying to conquer some of this market share by reducing the GBTC rate”, points out a Bloomberg Intelligence analysis.
The new bitcoin fund still has a long lock-up period
However, the lock-up period that Osprey imposes may weigh against its fund. While in GBTC the investor cannot trade the shares for six months, in Osprey’s product, this period is one year. However, Greg King, CEO of Osprey Funds, told Bloomberg that the company would start trying to reduce to six months.
Under the name OBTC, Osprey’s trust began to be listed on the market on January 15. However, the fund is not yet 100% available, as the executive explained to Cointelegraph.
“As of 1/14, the product met the requirements to be quoted under the OBTC ticker in the OTC market. Over the next 30 days, the fund will seek eligibility for DTC and, after February 14, all market makers will be able to collect it. After this point, it will be considered ‘fully released’,” he noted.