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Item 9A. Controls and Procedures

2025-03-26 compared with 2024-03-26 · 608 added, 350 removed, 311 unchanged (75% of the section changed)

1 unchanged sentence

Disclosure Controls and Procedures

The duly authorized officers of the Sponsor performing

functions equivalent to those a principal executive officer and principal financial officer of the Trust would perform if the Trust had

any officers, have evaluated the effectiveness of the Trust’s disclosure controls and procedures, and have concluded that the disclosure

controls and procedures of the Trust were effective as of the end of the period covered by this report to provide reasonable assurance

that information required to be disclosed in the reports that the Trust files or submits under the Securities Exchange Act of 1934, as

amended, is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that

it is accumulated and communicated to the duly authorized officers of the Sponsor performing functions equivalent to those a principal

executive officer and principal financial officer of the Trust would perform if the Trust had any officers, as appropriate to allow timely

decisions regarding required disclosure.

There are inherent limitations to the effectiveness

of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the

controls and procedures.

Exemption from Management’s Report on

Internal Control over Financial Reporting

This annual report does not include a report of

management’s assessment regarding internal control over financial reporting due to a transition period established by rules of the

Securities and Exchange Commission for newly public companies.

The duly authorized officers

of the Sponsor performing functions equivalent to those a principal executive officer and principal financial officer of the Trust would

perform if the Trust had any officers, have evaluated the effectiveness of the Trust’s disclosure controls and procedures, and have

concluded that the disclosure controls and procedures of the Trust were effective as of the end of the period covered by this report to

provide reasonable assurance that information required to be disclosed in the reports that the Trust files or submits under the Exchange

Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it

is accumulated and communicated to the duly authorized officers of the Sponsor performing functions equivalent to those a principal executive

officer and principal financial officer of the Trust would perform if the Trust had any officers, as appropriate to allow timely decisions

regarding required disclosure.

There are inherent limitations

to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention

or overriding of the controls and procedures.

Management’s Report on Internal Control

over Financial Reporting

The Sponsor’s management

is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules

13a-15(f) and 15d-15(f).

The Trust’s internal control over financial reporting is a process designed to provide reasonable assurance

regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with

Internal control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records

that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Trust’s assets, (2) provide reasonable

assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that

the Trust’s receipts and expenditures are being made only in accordance with appropriate authorizations;

and (3) provide reasonable

assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Trust’s assets that could

have a material effect on the financial statements.

Because of its inherent limitations,

internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness

to future periods are subject to the risk that controls may become ineffective because of changes in conditions, or that the degree of

compliance with the policies or procedures may deteriorate.

The Principal Executive Officer

and Principal Financial and Accounting Officer of the Sponsor assessed the effectiveness of the Trust’s internal control over financial

reporting as of December 31, 2024.

In making this assessment, they used the criteria set forth by the Committee of Sponsoring Organizations

of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013).

Their assessment included an evaluation of the design

of the Trust’s internal control over financial reporting and testing of the operational effectiveness of its internal control over

financial reporting.

Based on their assessment and those criteria, the Principal Executive Officer and Principal Financial and Accounting

Officer of the Sponsor concluded that the Trust maintained effective internal control over financial reporting as of December 31, 2024.

Because we are an “emerging

growth company” under the JOBS Act, our independent registered public accounting firm is not required to attest to the effectiveness

of our internal control over financial reporting for so long as we are an emerging growth company.

Other Information

No officers or directors of the Sponsor have adopted ,

modified, or terminated trading plans under either a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement (as such terms are defined in

Item 408 of Regulation S-K of the Securities Act of 1933) during the period from December 12, 2023 (initial seed creation date) through

December 31, 2023.

No officers or directors of

the Sponsor have adopted , modified , or terminated trading plans under either a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement (as

such terms are defined in Item 408 of Regulation S-K of the Securities Act) during the quarter ended December 31, 2024.

Disclosure Regarding Foreign Jurisdictions

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Corporate Governance

The Trust does not have any directors, officers,

or employees.

The following persons, in their respective capacities as directors or executive officers of the Sponsor, a Delaware limited

liability company, perform certain functions with respect to the Trust that, if the Trust had directors or executive officers, would typically

be performed by them.

Hany Rashwan is CEO of the Sponsor and Ophelia

Snyder is President and Chief Financial Officer of the Sponsor.

Hany Rashwan , 33, co-founded the parent

organization of Sponsor and 21Shares AG in 2018 and has served as its CEO since inception.

In addition to co-founding 21Shares AG, Mr.

Rashwan is a serial entrepreneur and Forbes 30 Under 30 alum.

He previously founded social commerce company, Ribbon, and enterprise fintech

company, Payout.

He was born and raised in Egypt and the United States and holds a bachelor’s in history from Columbia University.

Ophelia Snyder , 31, co-founded the parent

organization of Sponsor and 21Shares AG in 2018 and has served as its President since inception.

In addition to co-founding 21Shares AG.

Snyder is an EY Entrepreneurial Winning Woman EMEIA, Forbes 30 Under 30 alum, and was named on Bilanz’s Top 100 Bankers of Switzerland

She began her career working in venture capital and then investment banking.

She was born and raised in the United States and Italy

and attended Stanford University and received her Master of Business Administration from the New York University Stern School of Business.

The Trust does not have a code of ethics as it

does not have any directors, officers, or employees.

The Sponsor has a code of ethics (the “Code

of Ethics”) that applies to its executive officers, including its Principal Executive Officer and Principal Financial Officer, who

perform certain functions with respect to the Trust that, if the Trust had executive officers would typically be performed by them.

Sponsor’s Policies are in place and require that the Sponsor eliminate, mitigate, or otherwise disclose conflicts of interest.

Additionally,

the Sponsor has adopted policies and procedures requiring that certain applicable personnel pre-clear personal trading activity in which

bitcoin is the referenced asset.

The Sponsor has also implemented an Information Barrier Policy restricting certain applicable personnel

from obtaining sensitive information.

The Sponsor believes that these controls are reasonably designed to mitigate the risk of conflicts

of interest and other impermissible activity.

The Code of Ethics is available on request, free of charge, by writing the Sponsor at etf@21shares.com

or calling the Sponsor at (646) 370-6016.

The Trust does not have any

directors, officers, or employees.

The following persons, in their respective capacities as directors or executive officers of the Sponsor,

a Delaware limited liability company, perform certain functions with respect to the Trust that, if the Trust had directors or executive

officers, would typically be performed by them.

Russell Barlow is CEO of the

Sponsor, Duncan Moir is President of the Sponsor, Edel Bashir is Chief Operating Officer of the Sponsor and Andres Velencia is the Executive

Vice President of Investment Management for the Sponsor.

Russell Barlow ,

51, has been the Chief Executive Officer of the Sponsor since March 2025, contributing more than 25 years of expertise in regulated asset

Previously, Russell was the Global Head of Multi Asset and Alternative Investment Solutions and Global Head of Alternative

Investment Solutions at abrdn plc, a global investment company (“abrdn”).

Over the course of his career, he has designed,

launched and managed a wide range of investment products.

Additionally, Russell has held a position as a Non-Executive Director at Archax,

the UK’s first FCA-regulated digital asset exchange.

Duncan Moir , 39,

has been the President of the Sponsor since March 2025, with deep expertise in crypto and blockchain strategy.

Previously, Duncan was

a Senior Investment Manager at abrdn.

He is an independent board member of Hedera Hashgraph LLC and an advisor to Web3 companies.

of Strathclyde graduate with a BA (Hons) in Economics, he is also a CFA and CAIA charterholder.

Edel Bashir , 45,

has been the Chief Operating Officer of the Sponsor since March 2025, with over 20 years of experience in asset management.

Edel was the COO of Multi Asset and Alternative Investment Solutions, COO of Alternatives and a Senior Investment Manager at abrdn.

expertise includes operation strategy, portfolio management, and hedge fund research.

A graduate of University College Cork, Ireland with

a BSc in Finance, she has held senior roles across Bermuda, Dublin and Boston.

Andres Valencia ,

37, is the Executive Vice President of Investment Management at the Sponsor and a member of the Executive Committee.

Before Andres joined

the Sponsor in June 2021, he was a VP of Operations at JPMorgan as part of the Beta Strategies Group and helped launch and build the company’s

ETF business.

Andres has over ten years of experience managing ETFs.

Andres started his career in Asset Servicing at Bank of New York

Mellon covering commodity and currency ETFs.

The Trust does not have a

code of ethics as it does not have any directors, officers, or employees.

The Sponsor has a code of

ethics (the “Code of Ethics”) that applies to its executive officers, including its Principal Executive Officer and Principal

Financial Officer, who perform certain functions with respect to the Trust that, if the Trust had executive officers would typically be

performed by them.

The Sponsor’s Policies are in place and require that the Sponsor eliminate, mitigate, or otherwise disclose conflicts

Additionally, the Sponsor has adopted policies and procedures requiring that certain applicable personnel pre-clear personal

trading activity in which bitcoin is the referenced asset.

The Sponsor has also implemented an Information Barrier Policy restricting

certain applicable personnel from obtaining sensitive information.

The Sponsor believes that these controls are reasonably designed to

mitigate the risk of conflicts of interest and other impermissible activity.

The Code of Ethics is available on request, free of charge,

by writing the Sponsor at etf@21shares.com or calling the Sponsor at (646) 370-6016.

Insider Trading Policy

The Trust does not have an insider trading policy

as it does not have any directors, officers, or employees.

The Sponsor has adopted an insider trading policy

applicable to the Sponsor’s directors, officers and employees, which is included as an exhibit to this annual report on Form 10-K.

Executive Compensation

The Trust does not have directors or executive

The Trust does not have directors

or executive officers.

The only ordinary expense paid by the Trust is the Sponsor’s fee.

For the period from December 12, 2023 (initial seed

creation date) through December 31, 2023, the Trust did not incur any Sponsor’s fee.

During the year ended December 31, 2023, the

Trust did not incur Sponsor’s fees.

Security Ownership of Certain Beneficial

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Security Ownership of Certain Beneficial Owners

There are no persons known by the Trust to own directly or indirectly

beneficially more than 5% of the outstanding Shares of the Trust as of March 26, 2024.

There are no persons known

by the Trust to own directly or indirectly beneficially more than 5% of the outstanding Shares of the Trust as of March 26, 2025.

Security Ownership of Management

The Trust does not have directors or executive officers.

The Trust does not have directors

or executive officers.

Change in Control

Neither the Sponsor nor the Trustee knows of any arrangements which

may subsequently result in a change in control of the Trust.

Neither the Sponsor nor the

Trustee knows of any arrangements which may subsequently result in a change in control of the Trust.

Securities Authorized for Issuance under Equity

Compensation Plans

The Trust has no securities authorized for issuance

under equity compensation plans.

The Trust has no securities

authorized for issuance under equity compensation plans.

Certain Relationships and Related

Principal Accounting Fees and Services

Fees for services performed by Cohen & Company,

Ltd., as paid by the Sponsor from the Sponsor fee, for the period ended December 31, 2023, were:

Fees for services performed

by Cohen & Company, Ltd., as paid by the Sponsor from the Sponsor fee, for the periods ended December 31, 2024 and 2023, were:

Audit-related fees

All other fees

In the table above, in accordance with the SEC’s

definitions and rules, Audit Fees are fees paid to Cohen & Company, Ltd.

for professional services for the audit of the Trust’s

financial statements included in the Form 10-K and review of financial statements included in the Forms 10-Q, and for services that are

normally provided by the accountants in connection with regulatory filings or engagements.

Audit Related Fees are fees for assurance and

related services that are reasonably related to the performance of the audit or review of the Trust’s financial statements.

In the table above, in accordance

with the SEC’s definitions and rules, Audit Fees are fees paid to Cohen & Company, Ltd.

for professional services for the audit

of the Trust’s financial statements included in the Form 10-K and review of financial statements included in the Forms 10-Q, and

for services that are normally provided by the accountants in connection with regulatory filings or engagements.

Audit Related Fees are

fees for assurance and related services that are reasonably related to the performance of the audit or review of the Trust’s financial

Approval of Independent Registered Public Accounting

Firm Services and Fees

The Sponsor approved all of the services provided

by Cohen & Company, Ltd.

The Sponsor approved all of

the services provided by Cohen & Company, Ltd.

described above.

The Sponsor pre-approved all audit services of the independent registered public accounting

firm, including all engagement fees and terms.

The Sponsor pre-approved all audit services of the independent registered

public accounting firm, including all engagement fees and terms.

Exhibits and Financial Statement Schedules

(a)(1) Financial Statements

See Index to Financial Statements on page F-1.

See Index to Financial Statements

(a)(2) Financial Statement Schedules

No financial statement schedules are filed

herewith because (i) such schedules are not required or (ii) the information required has been presented in the aforementioned

No financial statement schedules

are filed herewith because (i) such schedules are not required or (ii) the information required has been presented in the aforementioned

financial statements.

(a)(3) Exhibits

The following documents are filed herewith

or incorporated herein and made a part of this Annual Report:

The following documents are

filed herewith or incorporated herein and made a part of this Annual Report:

Exhibit Description

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Initial Seed Capital Subscription Agreement (4)

BitGo Custodial Services Agreement (6)

Anchorage Custodial Services Agreement (6)

Insider Trading Policies and Procedures (8)

Consent of Independent Registered Public Accounting Firm (7)

Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (8)

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Cover Page Interactive Data File (Embedded as Inline XBRL document and contained in Exhibit 101).*

(1) Incorporated by reference to

Pre-Effective Amendment No.

Incorporated by reference to Pre-Effective Amendment No.

3 filed by the Registrant on December 18, 2023.

(2) Incorporated by reference to

Pre-Effective Amendment No.

Incorporated by reference to Pre-Effective Amendment No.

5 filed by the Registrant on December 28, 2023.

(3) Incorporated by reference to

Pre-Effective Amendment No.

Incorporated by reference to Pre-Effective Amendment No.

6 filed by the Registrant on January 8, 2024.

1 unchanged sentence

7 filed by the Registrant on January 9, 2024.

Incorporated by reference to the Annual Report on Form 10-K filed by the Registrant on March 26, 2024.

Incorporated by reference to the Current Report on Form 8-K filed by the Registrant on September 12, 2024.

Incorporated by reference to Pre-Effective Amendment No.

8 filed by the Registrant on January 10, 2024.

Filed herewith.

Form 10-K Summary

GLOSSARY OF DEFINED

GLOSSARY OF DEFINED TERMS

“Advisers Act”:

The Investment

Advisers Act of 1940.

The Securities Act

Investment Company

The Investment Advisers Act of 1940, as

Article 8 of the New York Uniform Commercial

Investment Company Act of 1940, as amended.

“Additional Trust Expenses”:

Certain extraordinary, non-recurring

expenses that are not Sponsor-paid Expenses (as defined below), which the Sponsor does not assume, 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

“Administrator”:

The Bank of New

The Bank of New York Mellon.

“Authorized Participant”:

that purchases or redeems Baskets from or to the Trust.

A block of 5,000 Shares

used by the Trust to issue or redeem Shares.

“Basket Deposit”:

The total deposit

required to create each Basket.

Is a system for decentralized

digital value exchange that is designed to enable units of bitcoin to be transferred across borders without the need for currency conversion.

Bitcoin is not legal tender.

The supply of bitcoin is not determined by a central government, but rather by an open-source software program

that limits both the total amount of bitcoin that will be produced and the rate at which it is released into the network.

The responsibility

for maintaining the official ledger of who owns what bitcoin and for validating new bitcoin transactions is not entrusted to any single

central entity.

One that purchases or redeems

Baskets from or to the Trust.

“Basket” or “Creation Basket”:

A block of 5,000

Shares used by the Trust to issue or redeem Shares.

A system for decentralized digital value exchange

that is designed to enable units of bitcoin to be transferred across borders without the need for currency conversion.

Bitcoin is not

legal tender.

The supply of bitcoin is not determined by a central government, but rather by an open-source software program that limits

both the total amount of bitcoin that will be produced and the rate at which it is released into the network.

The responsibility for maintaining

the official ledger of who owns what bitcoin and for validating new bitcoin transactions is not entrusted to any single central entity.

Instead, it is distributed among the network’s participants.

“Bitcoin Counterparty”:

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.

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

dollars the bitcoin related to the Authorized Participant’s creation or redemption order.

“Bitcoin Custodian”:

Custody Trust Company, LLC.

Each of (i) Coinbase Custody Trust

Company, LLC, (ii) Anchorage Digital Bank N.A, and (iii) BitGo New York Trust Company, LLC.

“Blockchain (or Bitcoin blockchain)”:

the public transaction ledger of the Bitcoin network on which miners or mining pools solve algorithmic equations allowing them to add

records of recent transactions (called “blocks”) to the chain of transactions in exchange for an award of bitcoin from the

Bitcoin network and the payment of transaction fees, if any, from users whose transactions are recorded in the block being added.

The public transaction

ledger of the Bitcoin network on which miners or mining pools solve algorithmic equations allowing them to add records of recent transactions

(called “blocks”) to the chain of transactions in exchange for an award of bitcoin from the Bitcoin network and the payment

of transaction fees, if any, from users whose transactions are recorded in the block being added.

“Business Day”:

Any day other

than a day when the Exchange or the New York Stock Exchange is closed for regular trading.

Commodity Exchange Act

Commodity Futures Trading

Commission, an independent agency with the mandate to regulate commodity futures and options in the United States.

Internal Revenue Code

of 1986, as amended.

Any day other than a day when the Exchange

is closed for regular trading.

Central bank digital currencies.

“Cash Custodian”:

The Bank of New

Commodity Exchange Act of 1936, as amended.

Commodity Futures Trading Commission, an independent

agency with the mandate to regulate commodity futures and options in the United States.

Internal Revenue Code of 1986, as amended.

“Coinbase Global”:

Coinbase Global, Inc., the parent of

Coinbase, Inc.

“Cold Vault Balance”:

The Trust’s “cold storage”

or similarly secure technology.

“Connected Trading Venue”:

Trading venues (including third-party

venues and the Prime Broker’s own execution venue) where the Prime Broker executes orders to buy and sell bitcoin on behalf of clients.

“Constituent Exchange”:

A trading venue that is eligible

as in any of the CME CF Cryptocurrency Pricing Products if it offers a market that facilitates the spot trading of the relevant base digital

asset against the corresponding quote asset, including markets where the quote asset is made fungible with the accepted digital assets

and makes trade data and order data available through an application programming interface with sufficient reliability, detail and timeliness.

Decentralized finance.

California Department of Financial Protection and

The Depository Trust Company.

DTC will act as the securities depository for the Shares.

DTC will act as the

securities depository for the Shares.

“DTC Participant”:

An entity that

has an account with DTC.

Cboe BZX Exchange,

An entity that has an account with DTC.

Delaware Statutory Trust Act.

Cboe BZX Exchange, Inc.

“Exchange Act”:

The Securities

Exchange Act of 1934, as amended.

Financial Industry Regulatory

Authority, formerly the National Association of Securities Dealers.

generally accepted

accounting principles.

The Securities Exchange Act of 1934, as

The Financial Crimes Enforcement Network.

Financial Industry Regulatory Authority, formerly

the National Association of Securities Dealers.

Accounting principles generally accepted in the

United States of America.

“Indirect Participants”:

brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or

Banks, brokers, dealers and trust

companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly.

“Incidental Rights”:

acquire, or otherwise establish dominion and control over, any virtual currency or other asset or right, which rights are incident to

the Trust’s ownership of bitcoin and arise without any action of the Trust, or of the Sponsor or Sub-Adviser on behalf of the Trust.

Rights to acquire, or otherwise establish

dominion and control over, any virtual currency or other asset or right, which rights are incident to the Trust’s ownership of bitcoin

and arise without any action of the Trust, or of the Sponsor or Sub-Adviser on behalf of the Trust.

CF Bitcoin Reference Rate—New York Variant.

“Index Provider”:

CF Benchmarks Ltd.

Internal Revenue Service.

“IR Virtual Currency”:

currency tokens, or other assets or rights, acquired by the Trust through the exercise (subject to the applicable provisions of the Trust

Agreement) of any Incidental Right.

Virtual currency tokens, or other

assets or rights, acquired by the Trust through the exercise (subject to the applicable provisions of the Trust Agreement) of any Incidental

Know-Your-Transaction.

Coinbase Credit, Inc.

“Marketing Agent”:

Foreside Global

Services, LLC.

Net asset value of the

Foreside Global Services, LLC.

“Mutually Capped Liabilities”:

In respect of the Coinbase

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 Coinbase Custodian’s gross negligence, violation of its confidentiality, data protection and/or

information security obligations, or violation of any law, rule or regulation with respect to the provision of its services, the Coinbase

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

Custodian in the 12 months prior to the event giving rise to the Coinbase Custodian’s liability.

Net asset value of the Trust.

“NAV per Share”:

Net asset value

of the Trust per Share.

Net asset value of the Trust per Share.

National Futures Association.

Office of Foreign Assets Control of the U.S.

“PB Mutually Capped Liabilities”:

In respect of the Prime

Broker’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 Prime Broker’s gross negligence, violation of its confidentiality, data protection and/or information

security obligations, violation of any law, rule or regulation with respect to the provision of its services, or the full amount of the

Trust’s assets lost due to the insolvency of or security event at a Connected Trading Venue, the Prime Broker’s liability

shall not exceed the greater of (A) $5 million and (B) the aggregate fees paid by the Trust to the Prime Broker in the 12 months prior

to the event giving rise to the Prime Broker’s liability.

“Prime Broker”:

1 unchanged sentence

“Principal Market NAV”:

value of the Trust determined on a GAAP basis.

Net asset value of the Trust determined

on a GAAP basis.

“Principal Market NAV per Share”:

Net asset value of the Trust per Share determined on a GAAP basis.

Net asset value of the

Trust per Share determined on a GAAP basis.

“Redemption Order Date”:

a redemption order is received in satisfactory form by the Marketing Agent.

The record of all

shareholders and holders of the Shares in certificated form kept by the Administrator.

Securities and

Exchange Commission.

The date a redemption order is

received in satisfactory form by the Marketing Agent.

The record of all Shareholders and holders

of the Shares in certificated form kept by the Administrator.

“Relevant Coinbase Entities”:

Coinbase Global and Coinbase

Securities and Exchange Commission.

“Securities Act”:

The Securities Act of 1933, as amended.

“Seed Capital Investor”:

US LLC, a Delaware limited liability company.

21Shares US LLC, a Delaware limited

liability company.

“Seed Creation Baskets”:

of the Trust purchased by the Seed Capital Investor.

Common shares representing

fractional undivided beneficial interests in the Trust.

Shares of the Trust purchased

by the Seed Capital Investor.

Common shares representing fractional undivided

beneficial interests in the Trust.

“Shareholders”:

Holders of Shares.

21Shares US LLC, a

Delaware limited liability company.

21Shares US LLC, a Delaware limited liability

“Sponsor-paid Expenses”:

The fees and other expenses incurred

by the Trust in the ordinary course of its affairs, which the Sponsor assumes and pays, excluding taxes, but including (i) fees to the

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

“Sponsor Indemnified Party”:

The Sponsor and each of its

shareholders, members, directors, officers, employees, affiliates and subsidiaries.

“Sub-Adviser”:

ARK Investment

Management LLC, a Delaware limited liability company.

ARK Investment Management LLC, a Delaware

limited liability company.

“Trade Credits”:

Bitcoin or cash that are borrowed as trade

“Transfer Agent”:

New York Mellon.

ARK 21Shares Bitcoin

The Bank of New York Mellon.

ARK 21Shares Bitcoin ETF.

“Trust Agreement”:

Restated Trust Agreement of ARK 21Shares Bitcoin ETF.

Delaware Trust Company,

a Delaware trust company.

The owner or holder of

Amended and Restated Trust Agreement

of ARK 21Shares Bitcoin ETF.

Delaware Trust Company, a Delaware trust company.

“U.S Treasury Department”:

Department of the Treasury.

The owner or holder of Shares.

Pursuant to the requirements

1 unchanged sentence

behalf by the undersigned thereunto duly authorized.

21Shares Bitcoin ETF (Registrant)

ARK 21Shares Bitcoin ETF (Registrant)

21Shares US LLC, its Sponsor

Title (Capacity)

/s/ Hany Rashwan

/s/ Russell Barlow

Chief Executive Officer

March 26, 2025

Russell Barlow

(Principal Executive Officer)

/s/ Ophelia Snyder

Principal Financial Officer and

/s/ Duncan Moir

March 26, 2025

Ophelia Snyder

Principal Accounting Officer

(Principal Financial Officer and Principal Accounting Officer)

Pursuant to the requirements

2 unchanged sentences

Title (Capacity)

/s/ Hany Rashwan

/s/ Russell Barlow

Chief Executive Officer

March 26, 2025

Russell Barlow

(Principal Executive Officer)

/s/ Ophelia Snyder

Principal Financial Officer and

/s/ Duncan Moir

March 26, 2025

Ophelia Snyder

Principal Accounting Officer

(Principal Financial Officer and Principal Accounting Officer)

financial statements

Report of Independent Registered Public Accounting Firm (PCAOB ID 925 ) F-2

Statement of Assets and Liabilities F-3

Statement of Changes in Net Assets F-4

Statement of Cash Flows F-5

Statements of Assets and Liabilities F-3

Schedule of Investment F-4

Statement of Operations F-5

Statements of Changes in Net Assets F-6

Notes to Financial Statements F-7

of Independent Registered Public Accounting Firm

To the Sponsor and Shareholder of

To the Sponsor and Shareholders of

ARK 21Shares Bitcoin ETF

Opinion on the Financial Statements

We have audited the accompanying statement of assets

and liabilities of ARK 21Shares Bitcoin ETF (the “Trust”) as of December 31, 2023, and the related statements of changes in

net assets and cash flows, and the related notes, for the period December 12, 2023 (initial seed creation date) through

December 31, 2023 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present

fairly, in all material respects, the financial position of the Trust as of December 31, 2023, and the results of its changes in its net

assets and its cash flows for the period December 12, 2023 (initial seed creation date) through December 31, 2023, in conformity with

accounting principles generally accepted in the United States of America.

We have audited the accompanying statements of

assets and liabilities of ARK 21Shares Bitcoin ETF (the “Trust”) as of December 31, 2024 and 2023, including the schedule

of investment as of December 31, 2024, the related statement of operations for the year ended December 31, 2024 and the statements of

changes in net assets for the year ended December 31, 2024, and for the period from December 12, 2023 (initial seed creation date) through

December 31, 2023, including the related notes (collectively referred to as the “financial statements”).

In our opinion, the

financial statements present fairly, in all material respects, the financial position of the Trust as of December 31, 2024 and 2023, the

results of its operations for the year ended December 31, 2024, and changes in its net assets for the year ended December 31, 2024, and

for the period from December 12, 2023 (initial seed creation date) through December 31, 2023, in conformity with accounting principles

generally accepted in the United States of America.

Basis for Opinion

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of the Trust’s management.

Our responsibility is to express an opinion on the Trust’s financial statements based on our audit.

Our responsibility is to express an opinion on the Trust’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and

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and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

The Trust is not required to have, nor were we engaged to perform, an

audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control

over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control

over financial reporting.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement whether due to error or fraud.

The Trust is not required to have, nor were we engaged to

perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit includes performing procedures to assess

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

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Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our procedures included confirmation of cash owned as of December 31, 2023, by correspondence with the custodian.

Our audit also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation

of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our procedures included confirmation of cash and digital assets owned as of December 31, 2024 and 2023, by correspondence with the custodians

and bitcoin trading counterparties.

Our audits also included evaluating the accounting principles used and significant estimates made

by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable

basis for our opinion.

We have served as the Trust’s auditor since

/s/ Cohen & Company,

/S/ COHEN & COMPANY, LTD.

COHEN & COMPANY, LTD.

Hunt Valley, Maryland

Towson, Maryland

March 26, 2025

We have served as the auditor

of the Trust since its commencement of operations.

21shares Bitcoin ETF

STATEMENT OF ASSETS AND LIABILITIES

At December 31, 2023

ARK 21SHARES BITCOIN ETF

STATEMENTS OF ASSETS AND LIABILITIES

(Amounts in thousands, except Share and per

Share amounts)

Investment in bitcoin, at fair value (cost 3,077,870 , and $ - , respectively)

Bitcoin sold receivable

Capital shares payable

Sponsor fee payable

Total liabilities

Commitments and contingent liabilities (Note 9)

Net assets consists of:

Paid-in-capital

Accumulated earnings (loss)

Shares issued and outstanding, no par value, unlimited amount authorized

Net asset value per share

rounds to less than $1,000.

See Note 1 to the Notes to financial statements.

The accompanying notes are an integral part

of the financial statements.

21shares Bitcoin ETF

STATEMENT OF CHANGES IN NET ASSETS

For the period December 12, 2023 (initial seed

creation date) through December 31, 2023

Net Assets, beginning of period

For the period

2023 (initial seed creation date) through December 31, 2023

Increase (decrease) in net assets resulting from operations:

ARK 21SHARES BITCOIN ETF

SCHEDULE OF INVESTMENT

(Amounts in thousands, except Quantity of bitcoin

and percentages)

December 31, 2024 *

Investment in bitcoin

Total investments

Liabilities in excess of other assets

comparative schedule has been provided as the Trust did not hold any bitcoin as of December 31, 2023.

The accompanying notes are an integral part

of the financial statements.

ARK 21SHARES BITCOIN ETF

STATEMENT OF OPERATIONS

(Amounts in thousands)

Total expenses

Less waiver and reimbursement

Net investment loss

Net realized gain (loss) on investment in bitcoin

Net change in unrealized appreciation (depreciation)

Net increase (decrease) in net assets resulting from operations

Increase (decrease) in net assets resulting from capital share transactions:

Realized and change in unrealized gain (loss)

Net realized gain on investment in bitcoin sold to pay Sponsor fee

Net realized gain on investment in bitcoin sold for redemptions

Net change in unrealized appreciation (depreciation) on investment in bitcoin

Net realized and change in unrealized gain (loss)

Net increase in net assets resulting from operations

* No prior year comparative statement has been provided as

this is the first fiscal year of the Trust’s operations.

The accompanying notes are an integral part

of the financial statements.

ARK 21SHARES BITCOIN ETF

STATEMENTS OF CHANGES IN NET ASSETS

(Amounts in thousands, except change in Shares issued

and redeemed)

seed creation

Net assets, beginning of period

Contributions for Shares issued

Distributions for Shares redeemed

Net increase in net assets resulting from capital share transactions

Increase (decrease) in net assets

( 3,443,401 )

Net investment loss

Net realized gain on investment in bitcoin sold to pay Sponsor fee

Net realized gain on investment in bitcoin sold for redemptions

Net change in unrealized appreciation (depreciation) on investment in bitcoin

Net assets, end of period

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Shares redeemed

Net increase (decrease) in Shares issued and outstanding

( 48,870,002 )

Net increase in

Shares issued and outstanding

The amount represents the initial seed on December 12, 2023.

The accompanying notes are an integral part

of the Financial Statements.

21shares Bitcoin ETF

STATEMENT OF CASH FLOWS

For the period December 12, 2023 (initial seed

creation date) through December 31, 2023

For the period

2023 (initial seed creation date) through December 31, 2023

Cash Provided (used in) by Operating Activities:

Net increase (decrease) in net assets resulting from operations

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:

Cost of bitcoin purchased

Proceeds from bitcoin sold

Net cash provided by (used in) operating activities

Cash flow Provided by Financing Activities:

Shares issued

Shares redeemed

Net cash provided by (used in) financing activities

Net increase (decrease) in cash

Cash, beginning of period

Cash, end of period

amount represents the initial seed on December 12, 2023.

rounds to less than $1,000.

See Note 1 to the Notes to Financial Statements.

The accompanying notes are an integral part

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The Sponsor is a limited liability company formed in the state of Delaware on June 16, 2021, and is a wholly

owned subsidiary of Jura Pentium Inc., whose ultimate parent company is Amun Holdings Limited.

Coinbase Custody Trust Company, LLC (“Coinbase

Custody”) (the “Custodian”) is the custodian for the Trust and will hold all of the Trust’s bitcoin on the Trust’s

The transfer agent (the “Transfer Agent”) and the administrator for the Trust (the “Administrator”) is

Bank of New York Mellon.

owned subsidiary of Jura Pentium Inc., whose ultimate parent company is 21co Holdings Limited (formerly known as Amun Holdings Limited).

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

(“Anchorage”, and, together with Coinbase and BitGo, as the context may require, the “Custodian”, “Custodians”

and each a “Custodian”) are the custodians for the Trust and hold all of the Trust’s bitcoin on the Trust’s behalf.

The transfer agent (the “Transfer Agent”), the administrator for the Trust (the “Administrator”), and the cash

custodian (the “Cash Custodian”), is Bank of New York Mellon.

The Trust is an exchange-traded

fund (“ETF”) that issues units of beneficial interest (the “Shares”) representing fractional undivided beneficial

interests in its net assets that trade on the Cboe BZX Exchange, Inc.

fund that issues units of beneficial interest (the “Shares”) representing fractional undivided beneficial interests in its

net assets that trade on Cboe BZX Exchange, Inc.

(the “Exchange”).

The Shares were listed for trading

on the Exchange on January 10, 2024, under the ticker symbol “ARKB”.

The Shares were listed for trading on the Exchange on January

11, 2024, under the ticker symbol “ARKB”.

The Trust’s investment

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The Index is designed to reflect the performance of bitcoin in U.S.

to achieve its investment objective, the Trust holds bitcoin at its Custodian and values its Shares daily based on the Index.

to achieve its investment objective, the Trust holds bitcoin at its Custodians and values its Shares daily based on the Index.

ARK Investment Management

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On December 12, 2023, the

Sponsor, in its capacity as Seed Capital Investor, subject to conditions, purchased Seed Creation Baskets comprising 2 Shares at a per-Share

price of $ 50.00 , as described in “Seed Capital Investor.” Total proceeds to the Trust from the sale of these Seed Creation

Baskets were $ 100 .

Delivery of the Seed Creation Baskets was made on December 12, 2023.

Sponsor, in its capacity as Seed Capital Investor, subject to conditions, purchased the initial Seed Creation Baskets comprising 2 Shares

at a per-Share price of $ 50.00 , as described in “Seed Capital Investor.” Total proceeds to the Trust from the sale of these

Initial Seed Shares were $ 100 .

Delivery of the Seed Shares were made on December 12, 2023.

These Seed Creation Baskets were redeemed for

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On January 9, 2024 (the “Seed

Capital Purchase Date”), the Seed Capital Investor purchased the initial Seed Creation Baskets comprising 10,000 Shares (the “Initial

Capital Purchase Date”), the Seed Capital Investor purchased Seed Creation Baskets comprising 10,000 Shares (the “Initial

Seed Creation Baskets”) at a per-share price of $ 46.88 .

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Basis of Accounting

The Financial Statement has

The financial statements have

been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP” or “GAAP”).

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investment company solely for accounting purposes and not for any other purpose and follows the accounting and reporting guidance under

the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services

- Investment Companies, but is not registered, and is not required to be registered, as an investment company under the Investment Company

Act of 1940, as amended.

The Trust uses fair value as its method of accounting for bitcoin in accordance with its classification as an

investment company for accounting purposes.

the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial

Services - Investment Companies, but is not registered, and is not required to be registered, as an investment company under the Investment

Company Act of 1940, as amended.

The Trust uses fair value as its method of accounting for bitcoin in accordance with its classification

as an investment company for accounting purposes.

The preparation of the financial

statement in conformity with US GAAP requires the Trust to make estimates and assumptions that affect the reported amounts of assets and

liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period.

results may differ materially from such estimates as additional information becomes available or actual amounts may become determinable.

statements in conformity with US GAAP requires the Trust to make estimates and assumptions that affect the reported amounts of assets

and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results may differ materially from such estimates as additional information becomes available or actual amounts may become determinable.

Should actual results differ from those previously recognized, the recorded estimates will be revised accordingly with the impact reflected

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the bitcoin principal market (or in the absence of a principal market, the most advantageous market) for GAAP purposes consistent with

the application of the fair value measurement framework in FASB ASC 820.

A principal market is the market with the greatest volume and

activity level for the asset or liability.

The determination of the principal market will be based on the market with the greatest volume

and level of activity that can be accessed.

The Trust obtains relevant volume and level of activity information and based on initial analysis

will select an exchange market as the Trust’s principal market.

The NAV and NAV per Share will be calculated using the fair value

of bitcoin based on the price provided by this exchange market, as of 4:00 p.m.

the application of the fair value measurement framework in FASB ASC 820 – Fair Value Measurement.

A principal market is the market

with the greatest volume and activity level for the asset or liability.

The determination of the principal market will be based on the

market with the greatest volume and level of activity that can be accessed.

The Trust obtains relevant volume and level of activity information

and based on initial analysis will select an exchange market as the Trust’s principal market.

The net asset value (“NAV”)

and NAV per Share will be calculated using the fair value of bitcoin based on the price provided by this exchange market, as of 4:00 p.m.

ET on the measurement date for GAAP purposes.

will update its principal market analysis periodically and as needed to the extent that events have occurred, or activities have changed

in a manner that could change the Trust’s determination of the principal market.

The Trust will update its principal market analysis periodically and as needed to the extent

that events have occurred, or activities have changed in a manner that could change the Trust’s determination of the principal market.

Various inputs are used in

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Unobservable inputs, including

the Trust’s assumptions used in determining the fair value of investments, where there is little or no market activity for the asset or

liability at the measurement date.

the Trust’s assumptions used in determining the fair value of investments, where there is little or no market activity for the asset

or liability at the measurement date.

Fair Value Measurement Using

(Amounts in thousands)

December 31, 2024

Investment in bitcoin

comparative schedule has been provided as the Trust did not hold any bitcoin as of December 31, 2023.

The cost basis of the investment

in bitcoin recorded by the Trust for financial reporting purposes is the fair value of bitcoin at the time of transfer.

in bitcoin recorded by the Trust for financial reporting purposes is the fair value of bitcoin at the time of purchase.

The cost basis

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Investment Transactions

The Trust considers investment transactions to

be the receipt of bitcoin for Share creations and the delivery of bitcoin for Share redemptions or for payment of expenses in bitcoin.

The Trust records its investments transactions on a trade date basis and changes in fair value are reflected as net change in unrealized

appreciation or depreciation on investments.

Realized gains and losses are calculated using the specific identification method.

gains and losses are recognized in connection with transactions including settling obligations for the Sponsor’s Fee in bitcoin.

Calculation of Net Asset Value (NAV) and NAV

On each business day, as soon

as practicable after 4:00 p.m.

(Eastern Time), the net asset value of the Trust is obtained by subtracting all accrued fees, expenses

and other liabilities of the Trust from the fair value of the bitcoin and other assets held by the Trust.

The Trustee computes the net

asset value per Share by dividing the net asset value of the Trust by the number of Shares outstanding on the date the computation is

The Trust considers investment

transactions to be the receipt of bitcoin for Share creations and the delivery of bitcoin for Share redemptions or for payment of expenses

The Trust records its investments transactions on a trade date basis and changes in fair value are reflected as net change

in unrealized appreciation or depreciation on investments.

Realized gains and losses are calculated using the specific identification

Realized gains and losses are recognized in connection with transactions including settling obligations for the Sponsor’s

Fee in bitcoin.

Calculation of Net Asset Value “NAV”

and NAV per Share

On each day other than when

the Exchange is closed for regular trading (a “Business Day”), as soon as practicable after 4:00 p.m.

(Eastern Time), the

net asset value of the Trust is obtained by subtracting all accrued fees, expenses and other liabilities of the Trust from the fair value

of the bitcoin and other assets held by the Trust using the index price.

The Trustee computes the NAV per Share by dividing the NAV of

the Trust by the number of Shares outstanding on the date the computation is made.

Federal Income Taxes

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Each beneficial owner of Shares

will be 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.

The Sponsor has reviewed the tax positions as of December 31, 2023, and has determined that no provision for income tax is required in

the Trust’s financial statements.

will be 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.

The Sponsor has reviewed the tax positions as of December 31, 2024, and has determined that no provision for income tax

is required in the Trust’s financial statements.

Recently Issued Accounting Pronouncements

The Trust adopted FASB Accounting

Standards Update 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

The Trust operates in one segment.

The segment derives its revenues from Trust investments made in accordance with the defined investment

strategy of the Trust, as prescribed in the Trust’s prospectus.

The Chief Operating Decision Maker (“CODM”) is the Sponsor.

The CODM monitors the operating results of the Trust.

The financial information the CODM leverages to assess the segment’s performance

and to make decisions for the Trust’s single segment, is consistent with that presented within the Trust’s financial statements.

In December 2023, the FASB

issued Accounting Standards Update (“ASU”) 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60):

Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”).

ASU 2023-08 is intended to improve the accounting for certain

crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized

in net income.

The amendments also improve the information provided to investors about an entity’s crypto asset holdings by requiring

disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period.

ASU 2023-08 is effective

for annual and interim reporting periods beginning after December 15, 2024.

Early adoption is permitted for both interim and annual financial

statements that have not yet been issued.

The Trust adopted this new guidance with no material impact on its financial statements and

disclosures as the Trust uses fair value as its method of accounting for bitcoin in accordance with its classification as an investment

company for accounting purposes.

Fair Value of Bitcoin

The following represents the

changes in quantity of bitcoin and the respective fair value on December 31, 2024 *:

(Amounts in thousands, except Quantity of bitcoin)

Beginning balance as of January 1, 2024

Bitcoin purchased

( 48,891.5263 )

( 3,448,694 )

Net realized gain on investment in bitcoin sold to pay Sponsor fee

Net realized gain on investment in bitcoin sold for redemptions

Change in unrealized appreciation on investment in bitcoin

Ending balance as of December 31, 2024 *

prior year comparative period presented as this is the first fiscal year of the Trust’s operations.

Trust Expenses

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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 February 2024, at which time the waiver period ended.

The aggregate Sponsor

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

Except for during periods during which the Sponsor

Fee has been 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.

The Sponsor has agreed to

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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

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 1933 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 (as defined

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

(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.

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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

to protect the Trust or the interests of Shareholders, any indemnification of the bitcoin Custodians, Administrator or other agents, service

providers or counter-parties of the Trust, the fees and expenses related to the listing, and extraordinary legal fees and expenses, including

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The Trust creates and redeems

Shares on a continuous basis but only in Creation Units consisting of 5,000 Shares or multiples thereof.

Only Authorized Participants,

which are registered broker-dealers who have entered into written agreements with the Sponsor and the Administrator, can place orders.

The Trust engages in bitcoin transactions for converting cash into bitcoin (in association with purchase orders) and bitcoin into cash

(in association with redemption orders).

The Trust conducts its bitcoin purchase and sale transactions by, in its sole discretion, choosing

to trade directly with third parties (each, a “bitcoin Trading Counterparty”), who are not registered broker-dealers pursuant

to written agreements between such bitcoin Trading Counterparties and the Trust, or choosing to trade through the Prime Broker acting

in an agency capacity with third parties through its Coinbase Prime service pursuant to the Prime Broker Agreement.

A bitcoin Trading

Counterparty may be an affiliate of an Authorized Participant.

Shares at the NAV of date of the creation and redemption on a continuous basis but only in Creation Baskets consisting of 5,000 Shares

or multiples thereof.

Only Authorized Participants, which are registered broker-dealers who have entered into written agreements with

the Sponsor and the Administrator, can place orders.

The Trust engages in bitcoin transactions for converting cash into bitcoin (in association

with purchase orders) and bitcoin into cash (in association with redemption orders).

The Trust conducts its bitcoin purchase and sale

transactions by, in its sole discretion, choosing to trade directly with third parties (each, a “bitcoin Trading Counterparty”),

who are not registered broker-dealers pursuant to written agreements between such bitcoin Trading Counterparties and the Trust, or choosing

to trade through the Prime Broker acting in an agency capacity with third parties through its Coinbase Prime service pursuant to the Prime

Broker Agreement.

A bitcoin Trading Counterparty may be an affiliate of an Authorized Participant.

The Authorized Participants

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is unaffiliated with the Trust and the Sponsor.

Activity in Capital Transactions Issued and Redeemed:

Shares issued

Shares redeemed

( 48,870,002 )

Net Change in Capital Transactions Issued and Redeemed

(Amounts in thousands)

Activity in Capital Transactions Issued and Redeemed:

Shares issued

Shares redeemed

( 3,443,401 )

Net Change in Capital Transactions Issued and Redeemed

rounds to less than $ 1,000 .

See Note 1 to the Notes to Financial Statements.

Bitcoin purchased payable

represents the quantity of bitcoin purchased for the creation of Shares where the bitcoin has not yet settled.

Generally, bitcoin is transferred

within two Business Days of the trade date.

(Amounts in thousands)

Bitcoin purchased payable

sold receivable represents the quantity of bitcoin sold for the redemption of Shares where the bitcoin has not yet been settled.

bitcoin is transferred within two Business Days of the trade date.

(Amounts in thousands)

Bitcoin sold receivable

Related Parties

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As of December 31, 2024, the

Sponsor owned 2 Shares of the Trust.

Sponsor did not own any Shares of the Trust.

The Sponsor arranged for the

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the listing of Shares on the Exchange.

Quarterly Statement

of Operations (unaudited)

Fiscal Year Ended December 31, 2024*

(Amounts in thousands)

Waiver and Reimbursement

Net investment loss

Realized and change in unrealized gain (loss)

Net realized gain on investment in bitcoin sold to pay Sponsor fee

Net realized gain on investment in bitcoin sold for redemptions

Net change in unrealized appreciation (depreciation) on investment in bitcoin

Net realized and change in unrealized gain (loss)

Net increase (decrease) in net assets resulting from operations

$ ( 409,214 )

* No prior year comparative table has been provided as this

is the first fiscal year of the Trust’s operations.

Financial Highlights

Per Share Performance (for a Share

outstanding throughout the period presented)

Net asset value per Share, beginning of year

Net investment income (loss) on investment in bitcoin 1

Net realized and change in unrealized gain (loss) on investment in bitcoin 2

Net change in net assets from operations

Net asset value per Share, end of year

Total return, at net asset value 3

Ratio to average net assets 4

Net investment income (loss)

Gross expenses

prior year comparative financial statements have been provided as this is the first fiscal year of the Trust’s operations.

1 Calculated using average Shares outstanding.

2 The amount shown for a share outstanding throughout the year

may not agree with the change in the aggregate gains and losses for the year because of the timing of sales and repurchases of the Trust’s

shares in relation to fluctuating market values for the Trust.

3 Total return is calculated based on the change in value during

the period and is not annualized.

An individual shareholder’s total return and ratio may vary from the above total returns and

ratios based on the timing of contributions to and withdrawals from the Trust.

4 Annualized.

Commitments and Contingent Liabilities

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the Trust may enter into contracts that contain a variety of general indemnification clauses.

The Trust’s maximum exposure under these

arrangements is unknown as this would involve future claims that may be made against the Trust which have not yet occurred and cannot

The Trust’s maximum exposure under

these arrangements is unknown as this would involve future claims that may be made against the Trust which have not yet occurred and cannot

be predicted with any certainty.

However, the Sponsor believes the risk of loss under these arrangements to be remote.

Concentration Risk

Unlike other funds that may

invest in diversified assets, the Trust’s investment strategy is concentrated in a single asset within a single asset class.

concentration maximizes the degree of the Trust’s exposure to a variety of market risks associated with bitcoin and digital assets.

By concentrating its investment strategy solely in bitcoin, any losses suffered as a result of a decrease in the value of ether can be

expected to reduce the value of an interest in the Trust and will not be offset by other gains if the Trust were to invest in underlying

assets that were diversified.

Indemnification

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shareholders, members, directors, officers, employees, affiliates, and subsidiaries will be indemnified by the Trust and held harmless

against any losses, liabilities or expenses incurred in the performance of its duties under the Declaration of Trust without gross negligence,

against any losses, liabilities or expenses incurred in the performance of its duties under the Trust Agreement without gross negligence,

bad faith, or willful misconduct.

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opinion, endorsement, assignment, draft, or any other document of any kind prima facie properly executed and submitted to it by the Trustee,

the Trustee’s counsel or by any other person for any matters arising under the Declaration of Trust.

The Sponsor shall in no event

be deemed to have assumed or incurred any liability, duty, or obligation to any Shareholder or to the Trustee other than as expressly

provided for in the Declaration of Trust.

Such indemnity includes payment from the Trust of the costs and expenses incurred in defending

against any indemnified claim or liability under the Declaration of Trust.

the Trustee’s counsel or by any other person for any matters arising under the Trust Agreement.

The Sponsor shall in no event be

deemed to have assumed or incurred any liability, duty, or obligation to any Shareholder or to the Trustee other than as expressly provided

for in the Trust Agreement.

Such indemnity includes payment from the Trust of the costs and expenses incurred in defending against any

indemnified claim or liability under the Trust Agreement.

The Trustee will not be liable

or accountable to the Trust or any other person or under any agreement to which the Trust or any series of the Trust is a party, except

for the Trustee’s breach of its obligations pursuant to the Declaration of Trust or its own willful misconduct, bad faith or gross

The Trustee and each of the Trustee’s officers, affiliates, directors, employees, and agents will be indemnified by

the Trust from and against any losses, claims, taxes, damages, reasonable expenses, and liabilities incurred with respect to the creation,

operation or termination of the Trust, the execution, delivery or performance of the Declaration of Trust or the transactions contemplated

provided that the indemnified party acted without willful misconduct, bad faith or gross negligence.

for the Trustee’s breach of its obligations pursuant to the Trust Agreement or its own willful misconduct, bad faith or gross negligence.

The Trustee and each of the Trustee’s officers, affiliates, directors, employees, and agents will be indemnified by the Trust from

and against any losses, claims, taxes, damages, reasonable expenses, and liabilities incurred with respect to the creation, operation

or termination of the Trust, the execution, delivery or performance of the Trust Agreement or the transactions contemplated thereby;

that the indemnified party acted without willful misconduct, bad faith or gross negligence.

Subsequent Events

1 unchanged sentence

events and transactions for potential recognition or disclosure through the date the financial statements were issued and has determined

that there are no material events that would require disclosure in the financial statements, other than noted below.

The Trust began

operations and its shares started trading on the Cboe BZX Exchange, Inc.

on January 11, 2024.

Refer to Note one for the transactions

that occured subsequent to the period December 12, 2023 (initial seed creation date)

through December 31, 2023.

that there are no material events that would require disclosure in the financial statements.

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 9A. Controls and Procedures