OBTC - Osprey Bitcoin Trust: Now A Liquidation Value Play

2024-04-23 06:48:47 ET

Summary

• The Osprey Bitcoin Trust discount to NAV range is currently trading between 7-9%.
• The company's tender offer to buy OBTC shares at NAV was terminated due to SEC regulations, causing the NAV ratio to collapse further in late February.
• Osprey plans to sell or merge the fund with an existing Bitcoin ETF, but if unsuccessful, the fund will be liquidated and capital returned to shareholders.

Three months ago, I covered the Osprey Bitcoin Trust ( OBTC ) for Seeking Alpha. At that time, it was a fairly simple thesis. The conversion of Grayscale's Bitcoin Trust ( GBTC ) from a closed-end fund structure to an ETF eliminated the pricing arbitrage that GBTC traders had been enjoying for several years. As a closed-end fund, OBTC still provided arb traders a nice opportunity at a then 14% discount....

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