Weekly Update: 4th of September
What happened between the 28th of August and the 4th of September?
- US digital asset manager Bitwise will absorb $120 million worth of Bitcoin in its Bitcoin ETF from the Osprey Bitcoin Trust after reaching an asset purchase agreement. Read more
- Digital assets investment products continue to slump amid strong US economic data. Read more
- NFT marketplace OpenSea receives a Wells Notice from the Securities and Exchanges Commission (SEC) as the agency continues its legal attack on the industry. Read more
Bitwise acquires Osprey Bitcoin Trust
On August 28th, Bitwise Asset Management and Osprey Funds announced an asset purchase agreement. Through this deal, Bitwise’s ETF, Bitwise Bitcoin ETF (BITB), will absorb $120 million worth of Bitcoin from the Osprey Bitcoin Trust. Established in February 2021 with a 0.49% management fee, the Osprey Bitcoin Trust was initially a direct competitor to Grayscale. However, its shares began trading at a discount, and its performance lagged significantly behind Bitcoin. According to Osprey, the acquisition by Bitwise offers OBTC unitholders the chance to benefit from Bitwise’s scale and expertise.
Digital assets products experience outflows
Over the past few weeks, the latest U.S. figures have shown strength after the initial shock in August, which caused a sharp correction in financial markets as many feared the Federal Reserve (Fed) was behind on interest rate cuts. With stronger numbers now coming in, the expectation is that the Fed will cut rates by 25 basis points. While this is positive for risk assets like Bitcoin, larger cuts would have been more advantageous. During the week of August 26th to 31st, digital asset products saw significant outflows, led by Bitcoin with $319 million, followed by Ethereum with $5.7 million in outflows.
OpenSea receives Wells notice
On August 28th, Devin Felzer, CEO of NFT marketplace OpenSea, announced that the platform had received a Wells notice from the SEC. This formal notice indicates potential enforcement action, suggesting that NFTs traded on the platform may be considered unregistered securities. OpenSea vowed to 'stand up and fight,' arguing that such action could harm hundreds of thousands of artists who lack the resources to defend themselves. OpenSea joins a growing list of digital asset firms facing legal action for alleged securities violations. Unfortunately, we expect these legal challenges to continue until a new administration is in place in the White House.
In other digital assets news
- Ex-president Donald Trump sees his fourth NFT collection generate over $2.2 million in sales.
- The SEC has warned the FTX estate that it may oppose efforts to repay creditors with stablecoins or other digital assets.
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