Similar to Grayscale’s Bitcoin Trust, Osprey has launched its product known as OBTC. Grayscale’s competitor is now in the market, but we will see whether it become successful in catching the attention of wealthy investors or not.
Competitor of Grayscale
OBTC is an over-the-counter trust, which will function similarly to GBTC. According to the company, the Trust will help investors get easy exposure to cryptocurrency with a regulated instrument. The management fees are set at 0.49% compared to Grayscale’s 2% management fees on a yearly basis.
Greg King, the CEO of Osprey Funds, said OBTC reflects all requirements to be quoted in the OTC market. He further revealed that It would be fully functional after February 14.
Currently, Bitcoin Trust of Grayscale is the largest in the OTC market, holding more than 500,000 BTC, reported in November. In its recent update over Twitter, Grayscale has over $23 billion in assets under management. Investors invest in the top digital asset via GBTC that represents Bitcoin in “stock share form.”
As reported by Bloomberg, Osprey may achieve a significant portion of the market share. Furthermore, it is also revealed that Fidelity will serve its services as a custodian.
According to Bloomberg, Michael Sonnenshein, the CEO of Grayscale, welcomed a new competitor’s entrance and offered his good wishes.
On the downside, Osprey’s OBTC will lock up assets for a period of 12 months while Grayscale is offering just six months. However, the firm said it would reduce the time after some time.
In June 2020, investment company Wilshire Phoenix also applied with the US Securities and Exchange Commission (SEC) for a similar product.
To capture institutional investors, various cryptocurrency firms have been trying to launch products. The Securities and Exchange Commission has turned down many applications for exchange-traded funds (ETFs) because it is volatile in nature, and greater risk is involved.
However, if a Bitcoin ETF is approved, the BTC market’s control will shift from a mixture of retail and big investors into the hands of only institutional investors. The institutional players are holding it at a large scale and for a long period of time.
At press time, the top-ranked digital currency is standing at $36,653 after decreasing by 5.14% in the past 24-hours. Over the weekly timeframe, it is also down 9.19%.