Osprey Bitcoin Trust (OBTC), a challenger to behemoth Grayscale Bitcoin Trust (GBTC), has begun trading on the over-the-counter (OTC) market.
OBTC boasts a lower 0.49% management fee compared to GBTC’s 2% annual fee, but the product levies additional charges, including custody and legal fees, as The Block reported last month.
Detailing those charges on Tuesday, Osprey Funds CEO Greg King told The Block that the firm expects those charges to be “0.30% or less for 2021.”
Going forward, King expects those costs to “go down as a percentage of the fund as the fund grows in size, benefiting investors rather than the fund sponsor.”
While OBTC’s charges are low, market insiders told The Block recently that they don’t believe it will challenge GBTC’s market dominance. This is because GBTC boasts significant liquidity and often trades at a premium, they said at the time.
Given GBTC’s success, several crypto firms have moved to launch similar products in recent weeks. Bitwise, for instance, began the regulatory process to list its bitcoin fund on OTC markets. BlockFi launched its bitcoin trust that charges a management fee of 1.75%.