Investment manager Osprey Funds is very much ambitious to take over the management of Grayscale’s Bitcoin Trust (GBTC). Grey King, the CEO of Osprey, believes his company is the best-positioned third party to manage the Trust.
In an open letter to Grayscale Investments’ parent company Digital Currency Group, he said Osprey would slash GBTC’s management fee by around 75% to 0.49% a year. Osprey intends to implement a redemption program. GBTC has about $12 billion in assets and imposes a 2% management fee. But the fee has been criticized as unreasonable by the standards of passive crypto products. GBTC, as per YCharts.com, has been trading at a nearly 40% discount to its net asset value this week.
In June 2022, Grayscale filed a lawsuit against SEC as the regulator had rejected its proposal to convert GBTC to an ETF. Grayscale believes converting the GBTC to an ETF would help the company create and redeem shares. This would curtail GBTC’s discount to its underlying Bitcoins.
Michael Sonnenshein, Grayscale CEO, said they are not interested in offering a redemption program. He pointed out that if they are unsuccessful in converting GBTC to an ETF, the firm would look into a tender offer. Last year, Valkyrie Investments had proposed taking over GBTC in a year-end letter. Steven McClurg, Valkyrie co-founder, said his firm would facilitate orderly redemptions at net asset value and lower GBTC’s fee to 0.75%. And now, Osprey has raised the bar to 0.49%.
Osprey’s proposal comes after Fir Tree Partners alleged mismanagement of GBTC and demanded private Grayscale information.
