What changed in this filing

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Item 1. Business

2025-03-26 compared with 2024-03-26 · 247 added, 230 removed, 363 unchanged (57% of the section changed)

DESCRIPTION OF THE TRUST

The ARK 21Shares Bitcoin ETF

(the “Trust”) is an exchange-traded fund that issues common shares of beneficial interest (the “Shares”) that

trade on the Cboe BZX Exchange, Inc.

(the “Exchange”) under the symbol “ARKB.” The Trust’s investment objective

is to seek to track the performance of bitcoin, as measured by the performance of the CME CF Bitcoin Reference Rate - New York Variant

(the “Index”), adjusted for the Trust’s expenses and other liabilities.

In seeking to achieve its investment objective,

the Trust holds bitcoin and values its Shares daily based on the Index.

21Shares US LLC (the “Sponsor”) is the sponsor of

the Trust and Delaware Trust Company (the “Trustee”) is the trustee of the Trust.

The Bank of New York Mellon (“BNYM”)

serves as the Trust’s Administrator, Transfer Agent, and the Cash Custodian.

Coinbase Custody Trust Company, LLC (“Coinbase

Custody”) (the “Bitcoin Custodian”) is the bitcoin custodian for the Trust and holds all the Trust’s bitcoin on

the Trust’s behalf.

ARK Investment Management LLC (the “Sub-Adviser”) is the sub-adviser of the Trust and aids in the

marketing of the Shares.

The Trust is an exchange-traded

fund that issues common shares of beneficial interest (the “Shares”) that trade on the Cboe BZX Exchange, Inc.

(the “Exchange”)

under the symbol “ARKB.” The Trust’s investment objective is to seek to track the performance of bitcoin, as measured

by the performance of the CME CF Bitcoin Reference Rate - New York Variant (the “Index”), adjusted for the Trust’s expenses

and other liabilities.

In seeking to achieve its investment objective, the Trust holds bitcoin and values its Shares daily based on the

The Sponsor is the sponsor of the Trust and Delaware Trust Company (the “Trustee”) is the trustee of the Trust.

Bank of New York Mellon (“BNYM”) serves as the Trust’s Administrator, Transfer Agent, and the Cash Custodian.

Custody Trust Company, LLC (“Coinbase Custodian”), BitGo New York Trust Company, LLC (“BitGo”), and Anchorage

Digital Bank N.A (“Anchorage”, and, together with Coinbase Custodian and BitGo, as the context may require, the “Bitcoin

Custodians” and each a “Bitcoin Custodian”), are the Bitcoin Custodians for the Trust and hold all the Trust’s

bitcoin on the Trust’s behalf.

ARK Investment Management LLC (the “Sub-Adviser”) is the sub-adviser of the Trust and

aids in the marketing of the Shares.

The Trust is an exchange-traded

The Trust does not purchase or sell bitcoin other than in connection with the creation and redemption of Shares or to pay certain

expenses, which are facilitated by the Prime Broker, or any other prime brokers with whom the Trust contracts.

expenses, which are facilitated by Coinbase, Inc.

(the “Prime Broker”), or any other prime brokers with whom the Trust contracts.

The Trust is not managed like

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The Trust is not registered as

an investment company under the 1940 Act and is not required to register under such act.

The Trust does not and will not hold or trade

in commodity futures contracts regulated under the Commodity Exchange Act (“CEA”).

The Trust is not a commodity pool for purposes

of the CEA and none of the Sponsor, Trustee or the Marketing Agent is subject to regulation by the Commodity Futures Trading Commission

as a commodity pool operator or a commodity trading advisor under the CEA in connection with the shares.

The Sponsor is not registered

with the SEC as an investment adviser and is not subject to regulation by the SEC as such in connection with its activities with respect

to the Trust.

an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), and is not required to register

under such act.

The Trust does not and will not hold or trade in commodity futures contracts regulated under the Commodity Exchange Act,

as amended (“CEA”).

The Trust is not a commodity pool for purposes of the CEA and none of the Sponsor, Trustee or the Marketing

Agent is subject to regulation by the Commodity Futures Trading Commission (“CFTC”) as a commodity pool operator or a commodity

trading advisor under the CEA in connection with the shares.

The Sponsor is not registered with the SEC as an investment adviser and is

not subject to regulation by the SEC as such in connection with its activities with respect to the Trust.

The Sponsor maintains a website

at www.21shares.com/en-us, through which the Trust’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports

on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934,

as amended (“Exchange Act”), are made available free of charge after they have been filed or furnished to the SEC.

The information

on the Sponsor’s website is not, and shall not be deemed to be, part of this report or incorporated into any other filings we make

with the SEC.

Additional information regarding the Trust may also be found on the SEC’s EDGAR database at www.sec.gov.

The Trust is a Delaware statutory

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company formed in the state of Delaware on June 16, 2021.

The number of outstanding

Shares is expected to increase and decrease from time to time because of the creation and redemption of Baskets.

Shares are issued and redeemed

by the Trust in blocks of 5,000 Shares (each a “Basket” or “Creation Basket”).

The number of outstanding Shares

is expected to increase and decrease from time to time because of the creation and redemption of Baskets.

The creation and redemption

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paid solely out of the funds and property of the Trust.

The assets of the Trust consist primarily of bitcoin held by the Bitcoin Custodian

The assets of the Trust consist primarily of bitcoin held by the Bitcoin Custodians

on behalf of the Trust and cash.

Creation Units are redeemed by the Trust in exchange for an amount of bitcoin or cash equal to the amount

of bitcoin represented by the aggregate number of Shares redeemed.

Creation Baskets are redeemed by the Trust in exchange for an amount of cash equal to the amount of bitcoin

represented by the aggregate number of Shares redeemed.

The Trust is a passive investment

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The sale of bitcoin by the Trust is a taxable

event to shareholders (the “Shareholders”).

Under the Declaration of Trust,

Shareholders have no voting rights except as the Sponsor may consider desirable and so authorize in its sole discretion.

event to its shareholders (the “Shareholders”).

Under the Trust’s Amended

and Restated Trust Agreement (the “Trust Agreement”), Shareholders have no voting rights except as the Sponsor may consider

desirable and so authorize in its sole discretion.

The Sponsor may terminate

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The Sponsor will, within a reasonable time after

such termination, sell all the Trust’s bitcoin not already distributed to Authorized Participants redeeming Creation Units, if any,

in such a manner to effectuate orderly sales.

The Sponsor shall not be liable for or responsible in any way for depreciation or loss incurred

by reason of any sale or sales made in accordance with the provisions of the Declaration of Trust.

The Sponsor may suspend its sales of

the Trust’s bitcoin upon the occurrence of unusual or unforeseen circumstances.

such termination, sell all the Trust’s bitcoin not already distributed to Authorized Participants redeeming Creation Baskets, if

any, in such a manner to effectuate orderly sales.

The Sponsor shall not be liable for or responsible in any way for depreciation or loss

incurred by reason of any sale or sales made in accordance with the provisions of the Trust Agreement.

The Sponsor may suspend its sales

of the Trust’s bitcoin upon the occurrence of unusual or unforeseen circumstances.

The Trust’s investment

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Market and Fair Value Determination of bitcoin

The NAV of the Trust is used

by the Trust in its day-to-day operations to measure the net value of the Trust’s assets.

The NAV is calculated on each business

day and is equal to the aggregate value of the Trust’s assets less its liabilities based on the Index price.

In determining the

NAV of the Trust on any business day, the Administrator will calculate the price of the bitcoin held by the Trust as of 4:00 p.m.

The Administrator will also calculate the “NAV per Share” of the Trust, which equals the NAV of the Trust divided

by the number of outstanding Shares.

For purposes of making these calculations, a business day means any day other than a day when the

Exchange is closed for regular trading.

The NAV of the Trust is used by the Trust in its

day-to-day operations to measure the net value of the Trust’s assets.

The NAV is calculated on each day other than a day when the

Exchange is closed for regular trading (a “Business Day”) and is equal to the aggregate value of the Trust’s assets

less its liabilities based on the Index price.

In determining the NAV of the Trust on any Business Day, the Administrator will calculate

the price of the bitcoin held by the Trust as of 4:00 p.m.

ET on such day.

The Administrator will also calculate the “NAV per Share”

of the Trust, which equals the NAV of the Trust divided by the number of outstanding Shares.

In addition to calculating

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NAV and NAV per Share are

not measures calculated in accordance with GAAP and are not intended as substitute for Principal Market and Principal Market NAV per Share,

respectively.

not measures calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”)

and are not intended as substitute for Principal Market and Principal Market NAV per Share, respectively.

The Trust follows the provisions

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recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors.

Expenses and Realized Gain (Loss)

Fees, Expenses and Realized

The Trust pays the unitary

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performed under the Trust Agreement.

The Sponsor is waiving the entire Sponsor Fee for (i) a six-month period which commenced on January

11, 2024 (the day the Trust’s Shares were initially listed on the Exchange), or (ii) the first $1 billion of Trust assets, whichever

The Sponsor agreed to waive the entire Sponsor Fee for (i) a nine-month period which commenced on

January 11, 2024 (the day the Trust’s Shares were initially listed on the Exchange), or (ii) the first $1 billion of Trust assets,

whichever came first.

The Trust assets exceeded $1 billion in April 2024, at which time the waiver period ended.

Except for during periods

during which the Sponsor Fee is being waived, the Sponsor Fee accrues daily and is payable in bitcoin weekly in arrears.

The Administrator

calculates the Sponsor Fee on a daily basis by applying a 0.21% annualized rate to the Trust’s total bitcoin holdings, and the amount

of bitcoin payable in respect of each daily accrual is determined by reference to the Index.

The Sponsor has agreed to pay all operating

expenses (except for litigation expenses and other extraordinary expenses) out of the Sponsor Fee.

during which the Sponsor Fee has been waived, the Sponsor Fee accrues daily and is payable in bitcoin weekly in arrears.

The aggregate

Sponsor Fee paid to the Sponsor for the fiscal year ended December 31, 2024 was $5,732,049.

The Administrator calculates the Sponsor Fee

on a daily basis by applying a 0.21% annualized rate to the Trust’s total bitcoin holdings, and the amount of bitcoin payable in

respect of each daily accrual is determined by reference to the Index.

The Sponsor has agreed to pay all operating expenses (except for

litigation expenses and other extraordinary expenses) out of the Sponsor Fee.

As partial consideration for

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(ii) the Marketing Fee, (iii) fees to the Administrator, if any,

(iv) fees to the Bitcoin Custodian, (v) fees to the Transfer Agent, (vi) fees to the Trustee, (vii) the fees and expenses related to any

future listing, trading or quotation of the Shares on any listing exchange or quotation system (including legal, marketing and audit fees

and expenses), (viii) ordinary course legal fees and expenses but not litigation-related expenses, (ix) audit fees, (x) regulatory fees,

including if applicable any fees relating to the registration of the Shares under the Securities Act or Exchange Act, (xi) printing and

mailing costs;

(xii) costs of maintaining the Trust’s website and (xiii) applicable license fees (each, a “Sponsor-paid Expense”

and together, the “Sponsor-paid Expenses”), provided that any expense that qualifies as an Additional Trust Expense will be

deemed to be an Additional Trust Expense and not a Sponsor-paid Expense.

(iv) fees to the Bitcoin Custodians, (v) fees to the Transfer Agent, (vi) fees to the Trustee, (vii) the fees and expenses related to

any future listing, trading or quotation of the Shares on any listing exchange or quotation system (including legal, marketing and audit

fees and expenses), (viii) ordinary course legal fees and expenses but not litigation-related expenses, (ix) audit fees, (x) regulatory

fees, including if applicable any fees relating to the registration of the Shares under the Securities Act or the Exchange Act, (xi) printing

and mailing costs;

(xii) costs of maintaining the Sponsor’s website and (xiii) applicable license fees (each, a “Sponsor-paid

Expense” and together, the “Sponsor-paid Expenses”), provided that any expense that qualifies as an Additional Trust

Expense (as defined below) will be deemed to be an Additional Trust Expense and not a Sponsor-paid Expense.

The Sponsor does not, however,

assume certain extraordinary, non-recurring expenses that are not Sponsor-paid Expenses, including, but not limited to, taxes and governmental

charges, expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust

to protect the Trust or the interests of Shareholders, any indemnification of the Bitcoin Custodian, Administrator or other agents, service

providers or counterparties of the Trust, the fees and expenses related to the listing, and extraordinary legal fees and expenses, including

any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters (collectively, “Additional

Trust Expenses”).

Of the Sponsor-paid Expenses, ordinary course legal fees and expenses are subject to a cap of not more than $100,000

In the Sponsor’s sole discretion, all or any portion of a Sponsor-paid Expense may be redesignated as an Additional Trust

assume certain extraordinary, non-recurring expenses that are not Sponsor-paid Expenses (as defined below), including, but not limited

to, taxes and governmental charges, expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider)

on behalf of the Trust to protect the Trust or the interests of Shareholders, any indemnification of the Bitcoin Custodians, Administrator

or other agents, service providers or counterparties of the Trust, the fees and expenses related to the listing, and extraordinary legal

fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation

matters (collectively, “Additional Trust Expenses”).

Of the Sponsor-paid Expenses, ordinary course legal fees and expenses

are subject to a cap of not more than $100,000 per annum.

In the Sponsor’s sole discretion, all or any portion of a Sponsor-paid

Expense may be redesignated as an Additional Trust Expense.

After the payment of the Sponsor

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to cash may differ from the rate at which the Sponsor Fee was initially paid in bitcoin.

The Bitcoin Custodian assumes

The Bitcoin Custodians assume

the transfer fees associated with the transfer of bitcoin to the Sponsor with respect to the Sponsor Fee, and any further expenses associated

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Pursuant to the Trust Agreement,

the Sponsor or its delegates directs the Bitcoin Custodian to transfer bitcoin from the Trust’s Cold Vault Balance as needed to

pay the Sponsor’s Fee and Additional Trust Expenses, if any.

The Sponsor or its delegates endeavors to transfer the smallest amount

of bitcoin needed to pay applicable expenses.

The Sponsor, in arranging for payment of Additional Trust Expenses, may in its discretion

direct that the Trust’s bitcoin be exchanged for U.S.

Under such circumstances, the Trust will not utilize the Bitcoin

Custodian to arrange for the sale of the Trust’s bitcoin to pay the Trust’s expenses and liabilities.

Rather, the Sponsor

will arrange for the Prime Broker, an affiliate of the Bitcoin Custodian, or another third-party digital asset trading platform to exchange

the Trust’s bitcoin for U.S.

the Sponsor or its delegates direct the Bitcoin Custodians to transfer bitcoin from the Trust’s “cold storage” or similarly

secure technology (the “Cold Vault Balance”) as needed to pay the Sponsor’s Fee and Additional Trust Expenses, if any.

The Sponsor or its delegates endeavors to transfer the smallest amount of bitcoin needed to pay applicable expenses.

The Sponsor, in arranging

for payment of Additional Trust Expenses, may in its discretion direct that the Trust’s bitcoin be exchanged for U.S.

such circumstances, the Trust will not utilize the Bitcoin Custodians to arrange for the sale of the Trust’s bitcoin to pay the

Trust’s expenses and liabilities.

Rather, the Sponsor will arrange for the Prime Broker, an affiliate of one of the Bitcoin Custodians,

or another third-party digital asset trading platform to exchange the Trust’s bitcoin for U.S.

dollars in such a situation.

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or indirectly purchase, hold, deliver, or receive bitcoin as part of the creation or redemption process or otherwise direct the Trust

or a Bitcoin Counterparty with respect to purchasing, holding, delivering, or receiving bitcoin as part of the creation or redemption

or a Bitcoin Counterparty (defined below) with respect to purchasing, holding, delivering, or receiving bitcoin as part of the creation

or redemption process.

A “Bitcoin Counterparty” is a designated third party, who is not an Authorized Participant but who

may be an affiliate of an Authorized Participant, or the Prime Broker or Lender, as applicable, with whom the Sponsor has entered into

an agreement on behalf of the Trust, that will, acting as a counterparty, deliver, receive or convert to U.S.

dollars the bitcoin related

to the Authorized Participant’s creation or redemption order.

The Trust creates Shares by

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Bitcoin Counterparties deliver

bitcoin related to the Authorized Participant’s purchase order to the Trust’s Cold Balance Vault Account.

Authorized Participants

and Bitcoin Counterparties are not required to maintain an account with the Bitcoin Custodian.

bitcoin related to the Authorized Participant’s purchase order to the Cold Vault Balance.

Authorized Participants and Bitcoin Counterparties

are not required to maintain an account with any of the Bitcoin Custodians.

Creations and redemptions

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the listing of Shares on the Exchange.

The Sponsor does not exercise day-to-day oversight over the Trustee, the Bitcoin Custodian, or

The Sponsor does not exercise day-to-day oversight over the Trustee, the Bitcoin Custodians, or

the Index Provider.

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The Sponsor is a wholly owned

subsidiary of Amun Holdings Ltd.

At present, the primary business activities of Amun Holdings Ltd.

are providing exchange traded products

and tokenization services in the crypto space through its subsidiaries.

subsidiary of 21co Holdings Limited (formerly known as Amun Holdings Limited).

At present, the primary business activities of 21co Holdings

Limited are providing exchange traded products and tokenization services in the crypto space through its subsidiaries.

21Shares AG, an affiliate

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Additionally, as of

December 31, 2023, the Sponsor serves as sub-adviser to five investment companies registered under the Investment Company Act of 1940

Act, as amended.

December 31, 2024, the Sponsor serves as sub-adviser to five investment companies registered under the 1940 Act.

The Sponsor is not under any

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provided, however, that this provision will not protect the Sponsor against any liability to which

it would otherwise be subject by reason of its own gross negligence, bad faith, or wilful misconduct.

it would otherwise be subject by reason of its own gross negligence, bad faith, or willful misconduct.

The Sponsor may rely in good faith

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that such course of conduct was in the best interests of the Trust and such liability or loss was not the result of fraud, gross negligence,

bad faith, wilful misconduct, or a material breach of this Trust Agreement on the part of the Sponsor and (ii) any such indemnification

bad faith, willful misconduct, or a material breach of this Trust Agreement on the part of the Sponsor and (ii) any such indemnification

will be recoverable only from the Trust Estate.

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the Sponsor Indemnified Parties will survive the termination of the Trust Agreement.

The Sub-Adviser, ARK Investment

Management LLC, serves as the Trust’s sub-adviser.

The Sub-Adviser provides data, research, and, as needed, operational support

to the Trust.

ARK Investment Management

LLC, serves as the Trust’s sub-adviser.

The Sub-Adviser provides data, research, and, as needed, operational support to the Trust.

As of December 31, 2024, the Sub-Adviser had approximately $29.36 billion in assets under management.

The Trust is passively

managed and does not pursue active management investment strategies, and the Sponsor and the Sub-Adviser do not actively manage the bitcoin

held by the Trust.

This means that the Sponsor and the Sub-Adviser do not sell bitcoin at times when its price is high or acquire bitcoin

at low prices in the expectation of future price increases.

It also means that the Sponsor and the Sub-Adviser do not make use of any

of the hedging techniques available to professional bitcoin investors to attempt to reduce the risks of losses resulting from price decreases.

The Trust is passively managed and

does not pursue active management investment strategies, and the Sponsor and the Sub-Adviser do not actively manage the bitcoin held by

This means that the Sponsor and the Sub-Adviser do not sell bitcoin at times when its price is high or acquire bitcoin at low

prices in the expectation of future price increases.

It also means that the Sponsor and the Sub-Adviser do not make use of any of the

hedging techniques available to professional bitcoin investors to attempt to reduce the risks of losses resulting from price decreases.

The Sponsor entered into the Support Services Agreement with the Sub-Adviser and pays the Sub-Adviser out of the unitary fee it receives

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The Trustee is not personally liable

under any circumstances, except for its own wilful misconduct, bad faith, or gross negligence.

under any circumstances, except for its own willful misconduct, bad faith, or gross negligence.

The Trustee or any officer,

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provided, however, that the Sponsor and the Trust are not required to indemnify

any Indemnified Person for any Expenses that are a result of the wilful misconduct, bad faith or gross negligence of such Indemnified

any Indemnified Person for any Expenses that are a result of the willful misconduct, bad faith or gross negligence of such Indemnified

administrator

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Transfer AGENT

Bank of New York Mellon serves as the Transfer Agent of the Trust pursuant to the terms and provisions of the Transfer Agency and Service

Agreement (the “Transfer Agency and Service Agreement ” ).

Transfer Agent:

The Bank of New York Mellon

serves as the Transfer Agent of the Trust pursuant to the terms and provisions of the Transfer Agency and Service Agreement (the “Transfer

Agency and Service Agreement”).

The Transfer Agent:

(1) facilitates the issuance and redemption of Shares of the Trust;

(2) responds to correspondence by Trust shareholders

and others relating to its duties;

to correspondence by Trust shareholders and others relating to its duties;

(3) maintains shareholder accounts;

and (4) makes periodic reports to the Trust.

bitcoin custodian

Coinbase Custody Trust Company,

LLC is the bitcoin custodian for the Trust and holds all the Trust’s bitcoin on the Trust’s behalf.

The Bitcoin Custodian keeps

custody of all the Trust’s bitcoin, other than which is maintained in the Trading Balance with the Prime Broker, in the Vault Balance.

The Bitcoin Custodian keeps a substantial portion of the private keys associated with the Trust’s bitcoin in “cold storage”

or similarly secure technology.

Cold storage is a safeguarding method with multiple layers of protections and protocols, by which the

private key(s) corresponding to the Trust’s bitcoin is (are) generated and stored in an offline manner.

Private keys are generated

in offline computers that are not connected to the internet so that they are resistant to being hacked.

By contrast, in hot storage, the

private keys are held online, where they are more accessible, leading to more efficient transfers, though they are potentially more vulnerable

to being hacked.

While the Bitcoin Custodian will generally keep a substantial portion of the Trust’s bitcoin in cold storage on

an ongoing basis, it is possible that, from time to time, portions of the Trust’s bitcoin will be held outside of cold storage temporarily

in the Trading Balance maintained by the Prime Broker as part of trade facilitation in connection with creations and redemptions of Baskets,

to sell bitcoin including to pay Trust expenses, or to pay the Sponsor Fee, as necessary.

The Trust’s bitcoin held in the Cold Vault

Balance by the Bitcoin Custodian are held in segregated wallets and therefore are not commingled with the Bitcoin Custodian’s or

other customer assets.

and (4) makes periodic

reports to the Trust.

bitcoin custodianS

Coinbase, BitGo and Anchorage

are the Bitcoin Custodians for the Trust and hold all of the Trust’s bitcoin on the Trust’s behalf.

The Bitcoin Custodians keep

custody of all the Trust’s bitcoin, other than which is maintained in the Trading Balance with the Prime Broker, in the Cold Vault

The Bitcoin Custodians keeps a substantial portion of the private keys associated with the Trust’s bitcoin in “cold

storage” or similarly secure technology.

Cold storage is a safeguarding method with multiple layers of protections and protocols,

by which the private key(s) corresponding to the Trust’s bitcoin is (are) generated and stored in an offline manner.

are generated in offline computers that are not connected to the internet so that they are resistant to being hacked.

By contrast, in

hot storage, the private keys are held online, where they are more accessible, leading to more efficient transfers, though they are potentially

more vulnerable to being hacked.

While the Bitcoin Custodians will generally keep a substantial portion of the Trust’s bitcoin in

cold storage on an ongoing basis, it is possible that, from time to time, portions of the Trust’s bitcoin will be held outside of

cold storage temporarily in the Trading Balance maintained by the Prime Broker as part of trade facilitation in connection with creations

and redemptions of Baskets, to sell bitcoin including to pay Trust expenses, or to pay the Sponsor Fee, as necessary.

bitcoin held in the Cold Vault Balance by the Bitcoin Custodians are held in segregated wallets and therefore are not commingled with

the Bitcoin Custodians’ or other customer assets.

Cold storage of private keys

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device or printed medium and deleting the keys from all computers.

The Bitcoin Custodian may receive deposits of bitcoin but may not send

bitcoin without use of the corresponding private keys.

The Bitcoin Custodians may receive deposits of bitcoin but may not

send bitcoin without use of the corresponding private keys.

To send bitcoin when the private keys are kept in cold storage, unsigned transactions

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offline keys.

At that point, the Bitcoin Custodian can upload the fully signed transaction to an online network and transfer the bitcoin.

At that point, the Bitcoin Custodians can upload the fully signed transaction to an online network and transfer the bitcoin.

Such private keys are stored in cold storage facilities within the United States and Europe, exact locations of which are not disclosed

for security reasons.

A limited number of employees at the Bitcoin Custodian are involved in private key management operations, and the

Bitcoin Custodian has represented that no single individual has access to full private keys.

The Bitcoin Custodian’s

internal audit team performs periodic internal audits over custody operations, and the Bitcoin Custodian has represented that Systems

A limited number of employees at the Bitcoin Custodians are involved in private key management operations, and the

Bitcoin Custodians have each represented that no single individual has access to full private keys.

The Bitcoin Custodians’

internal audit team performs periodic internal audits over custody operations, and the Bitcoin Custodians have represented that Systems

and Organizational Control (“SOC”) attestations covering private key management controls are also performed on the Bitcoin

Custodian by an external provider.

The Bitcoin Custodian maintains

Custodians by an external provider.

The Bitcoin Custodians maintain

a commercial crime insurance policy, which is intended to cover the loss of client assets held in cold storage, including from employee

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Bitcoin held in the Trust’s

account with the Bitcoin Custodian is the property of the Trust.

account with the Bitcoin Custodians is the property of the Trust.

The Trust, the Sponsor and the service providers will not loan or pledge

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In the event of a fork, the

Custodial Services Agreement provides that the Bitcoin Custodian may temporarily suspend services, and may, in their sole discretion,

determine whether or not to support (or cease supporting) either branch of the forked protocol entirely, provided that the Bitcoin Custodian

Custodial Services Agreement provides that the Bitcoin Custodians may temporarily suspend services, and may, in their sole discretion,

determine whether or not to support (or cease supporting) either branch of the forked protocol entirely, provided that the Bitcoin Custodians

shall use commercially reasonable efforts to avoid ceasing to support both branches of such forked protocol and will support, at a minimum,

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The Custodial Services Agreement provides that, other than as set forth therein, and provided that the Bitcoin

Custodian shall make commercially reasonable efforts to assist the Trust to retrieve and/or obtain any assets related to a fork, airdrop

or similar event the Bitcoin Custodian shall have no liability, obligation or responsibility whatsoever arising out of or relating to

Custodians shall make commercially reasonable efforts to assist the Trust to retrieve and/or obtain any assets related to a fork, airdrop

or similar event the Bitcoin Custodians shall have no liability, obligation or responsibility whatsoever arising out of or relating to

the operation of the underlying software protocols relating to the Bitcoin network or an unsupported branch of a forked protocol and,

accordingly, Client acknowledges and assumes the risk of the same.

The Custodian Agreement further provides that, unless specifically

communicated by the Bitcoin Custodian and its affiliates through a written public statement on the Coinbase website, the Bitcoin Custodian

accordingly, the Trust acknowledges and assumes the risk of the same.

The Custodial Services Agreement further provides that, unless specifically

communicated by the relevant Bitcoin Custodian and its affiliates through a written public statement on their website, such Bitcoin Custodian

does not support airdrops, metacoins, colored coins, side chains, or other derivative, enhanced or forked protocols, tokens or coins,

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Under the Custodial Services

Agreement, the Bitcoin Custodian’s liability is limited as follows, among others:

Agreement, the Bitcoin Custodians’ liability is limited as follows, among others:

(i) other than with respect to claims and losses

arising from spot trading of bitcoin, or fraud or wilful misconduct, among others, the Bitcoin Custodian’s aggregate liability under

the Custodial Services Agreement shall not exceed the greater of (A) the greater of (x) $5 million and (y) the aggregate fees paid by

the Trust to the Bitcoin Custodian in the 12 months prior to the event giving rise to the Bitcoin Custodian’s liability, and (B)

the value of the affected bitcoin or cash giving rise to the Bitcoin Custodian’s liability;

(ii) the Bitcoin Custodian’s aggregate

liability in respect of each cold storage address shall not exceed $100 million;

(iii) in respect of the Bitcoin Custodian’s obligations

to indemnify the Trust and its affiliates against third party claims and losses to the extent arising out of or relating to, among others,

the Bitcoin Custodian’s violation of any law, rule or regulation with respect to the provision of its services, the Bitcoin Custodian’s

liability shall not exceed the greater of (A) $5 million and (B) the aggregate fees paid by the Trust to the Bitcoin Custodian in the

12 months prior to the event giving rise to the Bitcoin Custodian’s liability;

and (iv) in respect of any incidental, indirect,

special, punitive, consequential or similar losses, the Bitcoin Custodian is not liable, even if the Bitcoin Custodian has been advised

of or knew or should have known of the possibility thereof.

The Bitcoin Custodian is not liable for delays, suspension of operations,

failure in performance, or interruption of service to the extent it is directly due to a cause or condition beyond the reasonable control

of the Bitcoin Custodian.

Under the Custodial Services Agreement, except in the case of its negligence, fraud, material violation of applicable

law or wilful misconduct, the Bitcoin Custodian shall not have any liability, obligation, or responsibility for any damage or interruptions

caused by any computer viruses, spyware, scareware, Trojan horses, worms or other malware that may affect the Trust’s computer or

other equipment, or any phishing, spoofing or other attack, unless the Bitcoin Custodian fails to have commercially reasonable policies,

procedures and technical controls in place to prevent such damages or interruptions.

The Bitcoin Custodian may

arising from spot trading of bitcoin, or fraud or willful misconduct, among others, the Bitcoin Custodians’ aggregate liability

under the Custodial Services Agreement shall not exceed the greater of (A) the greater of (x) $5 million and (y) the aggregate fees paid

by the Trust to the Bitcoin Custodians in the 12 months prior to the event giving rise to the Bitcoin Custodians’ liability, and

(B) the value of the affected bitcoin or cash giving rise to the Bitcoin Custodians’ liability;

(ii) the Bitcoin Custodians’

aggregate liability in respect of each cold storage address shall not exceed $100 million;

(iii) in respect of the Bitcoin Custodians’

obligations to indemnify the Trust and its affiliates against third party claims and losses to the extent arising out of or relating to,

among others, the Bitcoin Custodians’ violation of any law, rule or regulation with respect to the provision of its services, the

Bitcoin Custodians’ liability shall not exceed the greater of (A) $5 million and (B) the aggregate fees paid by the Trust to the

Bitcoin Custodians in the 12 months prior to the event giving rise to the Bitcoin Custodians’ liability;

and (iv) in respect of

any incidental, indirect, special, punitive, consequential or similar losses, the Bitcoin Custodians are not liable, even if the Bitcoin

Custodians have been advised of or knew or should have known of the possibility thereof.

The Bitcoin Custodians are not liable for delays,

suspension of operations, failure in performance, or interruption of service to the extent it is directly due to a cause or condition

beyond the reasonable control of the Bitcoin Custodians.

Under the Custodial Services Agreement, except in the case of its negligence,

fraud, material violation of applicable law or willful misconduct, the Bitcoin Custodians shall not have any liability, obligation, or

responsibility for any damage or interruptions caused by any computer viruses, spyware, scareware, Trojan horses, worms or other malware

that may affect the Trust’s computer or other equipment, or any phishing, spoofing or other attack, unless the Bitcoin Custodians

fail to have commercially reasonable policies, procedures and technical controls in place to prevent such damages or interruptions.

The Bitcoin Custodians may

terminate the Custodial Services Agreement for any reason upon providing the applicable notice to the Trust, or immediately for Cause

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discretion, add or terminate custodians at any time.

The Sponsor may, in its sole discretion, change the custodian for the Trust’s

The Sponsor may, in its sole discretion, change the custodians for the Trust’s

bitcoin holdings, but it will have no obligation whatsoever to do so or to seek any terms for the Trust from other such custodians.

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Agreement, a portion of the Trust’s bitcoin holdings and cash holdings from time to time may be held with the Prime Broker, an affiliate

of the Bitcoin Custodian, in the Trading Balance, in connection with the creation and redemption of Shares via cash transactions or to

of one of the Bitcoin Custodians, in the Trading Balance, in connection with the creation and redemption of Shares via cash transactions

or to pay for Trust Expenses not assumed by the Sponsor in consideration for the Sponsor Fee.

The amount of bitcoin that may be held in

the Trading Balance will be limited to the amount necessary to process a given creation or redemption transaction, as applicable, or to

pay for Trust Expenses not assumed by the Sponsor in consideration for the Sponsor Fee.

The amount of bitcoin that may be held in the

Trading Balance will be limited to the amount necessary to process a given creation or redemption transaction, as applicable, or to pay

for Trust Expenses not assumed by the Sponsor in consideration for the Sponsor Fee.

The Sponsor may, in its sole

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it is unable to name the NBMMs due to confidentiality restriction.

Pursuant to the Prime Broker Agreement, the Trust may engage in purchases

or sales of bitcoin by placing orders with the Prime Broker.

The Prime Broker will route orders placed by the Sponsor through the Prime

Broker’s execution platform (the “Trading Platform”) to a Connected Trading Venue where the order will be executed.

Each order placed by the Sponsor will be sent, processed, and settled at each Connected Trading Venue to which it is routed.

Broker Agreement provides that the Prime Broker is subject to certain conflicts of interest, including:

(i) the Trust’s orders may

be routed to the Prime Broker’s own execution venue where the Trust’s orders may be executed against other customers of the

Prime Broker or with the Coinbase acting as principal, (ii) the beneficial identity of the counterparty purchaser or seller with respect

to the Trust’s orders may be unknown and therefore may inadvertently be another client of the Prime Broker, (iii) the Prime Broker

does not engage in front-running, but is aware of the Trust’s orders or imminent orders and may execute a trade for its own inventory

(or the account of an affiliate) while in possession of that knowledge and (iv) the Prime Broker may act in a principal capacity with

respect to certain orders.

As a result of these and other conflicts, when acting as principal, the Prime Broker may have an incentive

to favor its own interests and the interests of its affiliates over the Trust’s interests.

Pursuant to the Prime Broker

Agreement, the Trust may engage in purchases or sales of bitcoin by placing orders with the Prime Broker.

The Prime Broker will route

orders placed by the Sponsor through the Prime Broker’s execution platform (the “Trading Platform”) to a Connected Trading

Venue where the order will be executed.

Each order placed by the Sponsor will be sent, processed, and settled at each Connected Trading

Venue to which it is routed.

The Prime Broker Agreement provides that the Prime Broker is subject to certain conflicts of interest, including:

(i) the Trust’s orders may be routed to the Prime Broker’s own execution venue where the Trust’s orders may be executed

against other customers of the Prime Broker or with the Coinbase acting as principal, (ii) the beneficial identity of the counterparty

purchaser or seller with respect to the Trust’s orders may be unknown and therefore may inadvertently be another client of the Prime

Broker, (iii) the Prime Broker does not engage in front-running, but is aware of the Trust’s orders or imminent orders and may execute

a trade for its own inventory (or the account of an affiliate) while in possession of that knowledge and (iv) the Prime Broker may act

in a principal capacity with respect to certain orders.

As a result of these and other conflicts, when acting as principal, the Prime

Broker may have an incentive to favor its own interests and the interests of its affiliates over the Trust’s interests.

Subject to the foregoing,

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not be eligible for other use or withdrawal from the Trust’s Trading Balance.

The Trust’s Vault Balance may be used directly

to fund orders.

With each Connected Trading Venue, the Prime Broker shall establish an account in the Prime Broker’s name, or in

its name for the benefit of clients, to trade on behalf of its clients, including the Trust, and the Trust will not, by virtue of the

Trading Balance the Trust maintains with the Prime Broker, have a direct legal relationship, or account with, any Connected Trading Venue.

The Cold Vault Balance may be used directly to fund

With each Connected Trading Venue, the Prime Broker shall establish an account in the Prime Broker’s name, or in its name

for the benefit of clients, to trade on behalf of its clients, including the Trust, and the Trust will not, by virtue of the Trading Balance

the Trust maintains with the Prime Broker, have a direct legal relationship, or account with, any Connected Trading Venue.

The Prime Broker may terminate

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The Prime Broker and the Bitcoin

Custodian may, in their sole discretion, suspend, restrict or terminate the Trust’s prime broker services, including by suspending,

Custodians may, in their sole discretion, suspend, restrict or terminate the Trust’s prime broker services, including by suspending,

restricting or closing any account of the Trust covered under the Prime Broker Agreement for Cause, at any time and with prior notice

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rules, practices, procedures, and circumstances in the relevant market and to perform its duties without negligence, fraud, bad faith,

wilful misconduct, or reckless disregard of its duties under the Custody Agreement.

willful misconduct, or reckless disregard of its duties under the Custody Agreement.

Under the Custody Agreement, BNY Mellon is not liable

for any all losses, damages, costs, charges, expenses, or liabilities (including reasonable counsel fees and expenses) (collectively,

“Losses”) except to the extent caused by BNY Mellon’s own bad faith, negligence, wilful misconduct, or reckless disregard

of its duties under the Custody Agreement.

The Trust will indemnify and hold harmless BNY Mellon from and against all Losses, incurred

by BNY Mellon arising out of or relating to BNY Mellon’s performance under the Custody Agreement, except to the extent resulting

from BNY Mellon’s failure to perform its obligations under the Custody Agreement in accordance with the agreement’s standard

The Sponsor may, in its sole discretion, add or terminate cash custodians at any time.

for any losses, damages, costs, charges, expenses, or liabilities (including reasonable counsel fees and expenses) (collectively, “Losses”)

except to the extent caused by BNY Mellon’s own bad faith, negligence, willful misconduct, or reckless disregard of its duties under

the Custody Agreement.

The Trust will indemnify and hold harmless BNY Mellon from and against all Losses, incurred by BNY Mellon

arising out of or relating to BNY Mellon’s performance under the Custody Agreement, except to the extent resulting from BNY Mellon’s

failure to perform its obligations under the Custody Agreement in accordance with the agreement’s standard of care.

may, in its sole discretion, add or terminate cash custodians at any time.

marketing agent

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compliance with applicable SEC and Financial Industry Regulatory Authority (“FINRA”) advertising laws, rules, and regulations.

Creation Units are created

Creation Baskets are created

or redeemed only by Authorized Participants.

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The Authorized

Participant Agreement provides the procedures for the creation and redemption of Creation Units and for the delivery of cash in connection

Participant Agreement provides the procedures for the creation and redemption of Creation Baskets and for the delivery of cash in connection

with such creations or redemptions.

Additional Authorized Participants may be added at any time, subject to the discretion of the Sponsor.

The Sponsor intends to take the position that the Trust is properly

treated as a grantor trust for U.S.

The Sponsor intends to take

the position that the Trust is properly treated as a grantor trust for U.S.

federal income tax purposes.

Assuming that the Trust is a grantor trust, the Trust will not be subject

Assuming that the Trust is a

grantor trust, the Trust will not be subject to U.S.

federal income tax.

Rather, if the Trust is a grantor trust, each beneficial owner of Shares is treated as directly owning its

pro rata share of the Trust’s assets and a pro rata portion of the Trust’s income, gain, losses and deductions

will “flow through” to each beneficial owner of Shares.

If the Trust sells bitcoin (for example, to pay fees or expenses),

such a sale is a taxable event to Shareholders.

Upon a Shareholder’s sale of its Shares, the Shareholder will be treated as having

sold the pro rata share of the bitcoin held in the Trust at the time of the sale and may recognize gain or loss on such sale.

Rather, if the Trust is a grantor trust, each beneficial owner

of Shares is treated as directly owning its pro rata share of the Trust’s assets and a pro rata portion of the Trust’s

income, gain, losses and deductions will “pass through” to each beneficial owner of Shares.

If the Trust sells bitcoin (for

example, to pay fees or expenses), such a sale is a taxable event to Shareholders.

Upon a Shareholder’s sale of its Shares, the

Shareholder will be treated as having sold the pro rata share of the bitcoin held in the Trust at the time of the sale and may recognize

gain or loss on such sale.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business