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Item 2. Management’s Discussion and Analysis

2026-05-08 compared with 2025-11-14 · 93 added, 136 removed, 98 unchanged (70% of the section changed)

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

Management’s Discussion and

Analysis of Financial Condition and Results of Operations

This information should

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The Trust is not registered

as an investment company under the 1940 Act and is not a commodity pool for purposes of the CEA.

The Trust is managed and controlled by

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

The Sponsor is

not subject to regulation by the CFTC as a commodity pool operator with respect to the Trust, or a commodity trading advisor with respect

to the Trust.

The Trust is an exchange-traded fund that issues common units of beneficial interest representing fractional undivided beneficial

interests in its net assets that trade on the Exchange.

The Shares are listed for trading on the Exchange under the ticker symbol “ARKB”.

On December 12, 2023, the

Sponsor, in its capacity as Seed Capital Investor, subject to conditions, purchased the initial Seed Shares comprising two 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 Shares were

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

These Seed Shares were redeemed for cash on or about January 5, 2024.

On January 9, 2024 (the “Seed

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.

Total proceeds to the Trust from the sale of the Seed Creation Baskets were

On January 9, 2024, the Trust purchased 10 bitcoins with the proceeds of the Seed Creation Baskets by transacting with a

bitcoin Trading Counterparty to acquire bitcoin on behalf of the Trust in exchange for cash provided by the Sponsor in its capacity as Seed Capital

These Seed Creation Baskets were redeemed for cash on or about January 19, 2024.

On June 2, 2025, the Trust

announced that the Sponsor had approved the Share Split of all of the Shares.

In connection with the Share Split, every one Share that

was held by the Trust’s Record Holders at the close of business on June 12, 2025, automatically split into three Shares after market

close on June 13, 2025.

The Share Split became effective at market open on June 16, 2025.

Following the Share Split, the Shares continued

to trade under the ticker symbol “ARKB” under the same CUSIP, and the total NAV of the Trust did not change as a result of

the Share Split.

In addition, each Record Holder continued to hold the same percentage of the Trust’s outstanding Shares as

held immediately prior to the Share Split, and the Share Split did not modify the rights or preferences of the Shares.

The investment

objective, strategy, and underlying holdings of the Trust remained unchanged.

as an investment company under the 1940 Act and is not a commodity pool for purposes of the Commodity Exchange Act.

The Trust is managed

and controlled by the Sponsor.

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

owned subsidiary of 21co Holdings Limited.

The ultimate parent company of 21co Holdings Limited is FalconX.

The Sponsor is not subject

to regulation by the Commodity Futures Trading Commission as a commodity pool operator with respect to the Trust, or a commodity trading

advisor with respect to the Trust.

The Trust is an exchange-traded fund that issues common shares of beneficial interest representing

fractional undivided beneficial interests in its net assets that trade on the Exchange.

The Shares are listed for trading on the Exchange

under the ticker symbol “ARKB”.

The Trust’s investment

objective is to seek to track the performance of bitcoin, as measured by the performance of the Index, adjusted for the Trust’s

objective is to seek to track the performance of bitcoin, as measured by the performance of the Pricing Benchmark, adjusted for the Trust’s

expenses and other liabilities.

CF Benchmarks Ltd.

is the Index Provider.

The Index is designed to reflect the performance

of bitcoin in U.S.

In seeking to achieve its investment objective, the Trust holds bitcoin at its Custodians and values its Shares

daily based on the Index.

is the Pricing Benchmark Provider.

The Pricing Benchmark is designed to reflect the

performance of bitcoin in U.S.

In seeking to achieve its investment objective, the Trust holds bitcoin at its Custodians and

values its Shares daily based on the Pricing Benchmark.

The Trust is a passive investment vehicle and is not a leveraged product.

The Sponsor does not actively manage

the bitcoin held by the Trust.

Sponsor does not actively manage the bitcoin held by the Trust.

The Trust issues Shares only

in Creation Baskets of 5,000 or multiples thereof.

Creation Baskets are issued and redeemed in exchange for cash.

Individual Shares will

not be redeemed by the Trust but are listed and traded on the Exchange under the ticker symbol “ARKB.” The Trust issues Shares

in Creation Baskets on a continuous basis at the applicable NAV per Share on the creation order date.

Creation Baskets are issued and redeemed in exchange for cash or bitcoin.

Shares will not be redeemed by the Trust but are listed and traded on the Exchange under the ticker symbol “ARKB.” The Trust

issues Shares in Creation Baskets on a continuous basis at the applicable NAV per Share on the creation order date.

The Trust pays the unitary

Sponsor fee of 0.21% of the Trust’s bitcoin holdings.

The Sponsor fee is paid by the Trust to the Sponsor as compensation for services

performed under the Trust Agreement.

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 Trust incurred

Sponsor fees for the nine-month periods ended September 30, 2025 and 2024 of $7,583,835 and $3,784,619 net of Sponsor fees waived of $93,111,

respectively.

The Trust is an “emerging

growth company” as that term is used in the Securities Act and, as such, the Trust may elect to comply with certain reduced public

company reporting requirements.

Sponsor fee of 0.21% of the Trust’s NAV (the “Sponsor Fee”).

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 Sponsor fee is paid by the Trust to the Sponsor as compensation for services performed under the Trust Agreement.

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 NAV, and the amount of bitcoin payable in respect of each daily accrual is determined

by reference to the Pricing Benchmark.

Computation of NAV

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

The Administrator also calculates the “NAV per Share” of the Trust, which equals the NAV of the Trust divided by the

number of outstanding Shares.

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 Pricing Benchmark price.

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

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

ET on such day.

The Administrator also calculates 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

NAV and NAV per Share, for purposes of the Trust’s financial statements, the Trust determines the Principal Market NAV and Principal

NAV and NAV per Share, for purposes of the Trust’s financial statements, the Trust determines the net asset value of the Trust determined

on a GAAP basis (the “Principal Market NAV”) and net asset value of the Trust per Share determined on a GAAP basis (the “Principal

Market NAV per Share”) on each valuation date for such financial statements.

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using the fair value of bitcoin based on the price in the bitcoin market that the Trust considers its “principal market” as

ET on the valuation date, rather than using the Index.

ET on the valuation date, rather than using the Pricing Benchmark.

NAV and NAV per Share are

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that bitcoin is sold in its principal market to market participants (or in the absence of a principal market, the most advantageous market).

Trust utilizes an exchange

The Trust utilizes an exchange

traded price from the Trust’s principal market for bitcoin as of 4:00 p.m.

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Results of Operations (Amounts in thousands,

except price of bitcoin and Shares outstanding)

As of September 30, 2025,

the Trust had a net closing balance of 44,528.1082 bitcoins with a value of $5,079,980, based on the Index price of $114,084.80 on September

30, 2025 (CME CF Bitcoin Reference Rate – New York Variant, non-GAAP methodology).

As of September 30, 2025, the total market value

of the Trust’s bitcoin was $5,093,058, based on the price of a bitcoin in the principal market of $114,378.49 on September 30, 2025.

For the Three Months Ended September 30, 2025

except price and quantity of bitcoin and Shares outstanding)

As of March 31, 2026, the Trust had a net closing

balance of 35,246.5837 bitcoins with a value of $2,390,838, based on the Pricing Benchmark Price of $67,831.76 on March 31, 2026 (CME

CF Bitcoin Reference Rate – New York Variant, non-GAAP methodology).

As of March 31, 2026, the total market value of the Trust’s

bitcoin was $2,388,764, based on the price of a bitcoin in the principal market of $67,772.92 on March 31, 2026.

For the Three Months Ended March 31, 2026

The Trust’s NAV decreased

from $3,305,323 on December 31, 2025 to $2,388,670 on March 31, 2026, a 27.73% decrease.

The decrease in the Trust’s NAV resulted primarily

from a decrease in the price of bitcoin, which fell 22.56% from $87,515.28 on December 31, 2025 to $67,772.92 on March 31, 2026.

in the Trust’s NAV was further amplified by a net decrease in outstanding Shares, which fell from 113,755,000 Shares on December 31, 2025

to 106,210,000 Shares on March 31, 2026, a result of 19,980,000 Shares being created and 27,525,000 Shares being redeemed during

Net decrease in net assets

resulting from operations for the three months ended March 31, 2026 was $(716,842), resulting from a net change in unrealized depreciation

on investment in bitcoin of $(586,336), a net realized loss of $(128,899) from bitcoin sold for the redemption of Shares, a net realized

loss of $(260) from bitcoin sold to pay the Sponsor Fee, a net realized gain of $90 from in-kind liabilities paid, a net change in unrealized

and realized gain on sponsor fee payable of $8, and a net investment loss of $(1,445).

Other than the Sponsor Fee of $1,445, the Trust

had no expenses during the quarter.

For the Three Months Ended on March 31, 2025

The Trust’s NAV decreased

from $4,352,288 on December 31, 2024 to $3,915,458 on March 31, 2025, a 11.16% decrease.

The decrease in the Trust’s NAV resulted

primarily from a decrease in the price of bitcoin, which fell 14.67% from $93,390.22 as of December 31, 2024 to $81,444.71 as of March

The decrease in in the Trust’s NAV was partially offset by an increase in the number of shares outstanding from 140,070,000

on December 31, 2024 to 142,815,000 on March 31, 2025.

Net realized and change in

unrealized gain on investment in bitcoin for the three months ended September 30, 2025 was $320,440 which includes a change on unrealized depreciation on investment in bitcoin of $(136,721).

Net realized and change in unrealized gain on investment in bitcoin for the period

was driven by bitcoin price appreciation throughout the period from $107,753.77 per bitcoin as of June 30, 2025 to $114,379.49 per bitcoin

as of September 30, 2025.

Net increase in net assets resulting from operations was $317,667 for the three months ended September 30, 2025,

primarily driven by the aforementioned net realized and change in unrealized gain on investment in bitcoin.

For the Three Months ended on September 30,

The Trust’s NAV increased from $2,849,575 on June 30, 2024 to $3,206,095 on September 30, 2024.

The increase in the Trust’s NAV

resulted primarily from an increase in bitcoin price of 2.48% (from $61,929.29 per bitcoin as of June 30, 2024 to $63,464.76 per bitcoin

as of September 30, 2024) and an increase of number of shares outstanding from 46,050,000 on June 30, 2024 to 50,585,000 on September

The Trust’s net increase in net assets resulting

from operations for the period ended September 30, 2024 was $46,097.

This number is largely the result of a realized gain of $83 on the

sale of bitcoin for purposes of distributing to the Sponsor as the Sponsor’s fee and, net realized gain on investment in bitcoin

sold for redemptions of $53,132 partially offset by a change in unrealized depreciation on investment in bitcoin of $(5,609).

expenses for the quarter were $1,509, relating to the Sponsor’s fees.

For the Nine Months Ended September 30, 2025

The Trust’s NAV

increased from $4,352,288 on December 31, 2024 to $5,092,934 on September 30, 2025.

The increase in the Trust’s NAV resulted

primarily from an increase in the price of bitcoin of 22.47% (from $93,390.22 per bitcoin on December 31, 2024 to $114,378.49 per

bitcoin on September 30, 2025) and was offset by a net decrease of 6,030,000 in the number of shares outstanding from December 31,

2024 to September 30, 2025.

The Trust’s net increase

in net assets resulting from operations for the nine months ended September 30, 2025 was $927,779.

This was the result of a change in

unrealized depreciation on investment in bitcoin of $(184,085), a net realized gain of $1,795 on the sale of bitcoins for purposes of

distributing to the Sponsor as the Sponsor’s fee, and net realized gain on investment in bitcoin sold for redemptions of $1,117,653.

The Trust’s expenses for the nine-month period were $7,584 relating to the Sponsor’s fees.

For the Nine Months Ended September 30, 2024

The Trust’s NAV increased

from $- 1 on December 31, 2023 to $3,206,095 on September 30, 2024.

The increase in the Trust’s NAV resulted

primarily from an increase in the price of bitcoin of 36% (from $46,666.89 per bitcoin on January 11, 2024 to $63,464.76 per bitcoin on

September 30, 2024) and a net increase in the number of shares outstanding of 50,584,998 from December 31, 2023 to September 30, 2024.

The Trust’s net increase

in net assets resulting from operations for the nine months ended September 30, 2024 was $481,493.

This was the result of a change in

unrealized depreciation on investment in bitcoin of $296,403, a net realized gain of $410 on the sale of bitcoins for purposes of distributing

to the Sponsor as the Sponsor’s fee, and net realized gain on investment in bitcoin sold for redemptions of $188,372.

expenses for the nine-month period were $3,692, relating to the Sponsor’s fees.

1 Amount rounds to less than $1,000.

unrealized loss on investment in bitcoin for the period December 31, 2024 through March 31, 2025, was $(585,181) which includes a net

realized gain on investment in bitcoin of $321,579 and a net change in unrealized depreciation on investment in bitcoin of $(907,296).

Net realized and unrealized gain on investment in bitcoin for the period was driven by bitcoin price depreciation.

Net decrease in net

assets resulting from operations for the period ended March 31, 2025 was $(587,548), mainly attributed to a net decrease in the number

of shares outstanding accompanied by the aforementioned net realized gain and change in unrealized depreciation on investment in bitcoin.

The Trust’s expenses for the quarter were $2,367 relating to the Sponsor’s fees.

Liquidity and Capital Resources

1 unchanged sentence

any trends, demands, commitments, events, or uncertainties that are reasonably likely to result in material changes to its liquidity needs.

The Trust’s only ordinary recurring expense is the fee paid to the Sponsor at an annual rate of 0.21% of the daily NAV of the Trust.

The Trust’s only ordinary recurring expense is the fee paid to the Sponsor at an annual rate of 0.21% of the Trust’s total

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

2 unchanged sentences

$1 billion in February 2024, at which time the waiver period ended.

The aggregate Sponsor fee paid to the Sponsor for the period ended

September 30, 2025 was $7,818.

In exchange for the Sponsor’s fee, the Sponsor has agreed to assume the ordinary fees and expenses

incurred by the Trust, including but not limited to the following:

fees charged by the Sub-Adviser, Administrator, the Custodians, Transfer

Agent and the Trustee, the Marketing Fee, the Exchange’s listing fees, typical maintenance and transaction fees of the DTC, SEC

registration fees, printing and mailing costs, website fees, tax reporting fees, audit fees, license fees and expenses, up to $100,000

per annum in ordinary legal fees and expenses.

The Sponsor bears expenses in connection with the Trust’s organization and initial

offering costs.

In exchange for the Sponsor’s fee, the Sponsor has agreed to

assume the ordinary fees and expenses incurred by the Trust, including but not limited to the following:

fees charged by the Sub-Adviser,

Administrator, the Custodians, the Transfer Agent and the Trustee, the Marketing Fee, the Exchange’s listing fees, typical maintenance

and transaction fees of the Depository Trust Company (“DTC”), U.S.

Securities and Exchange (“SEC”) registration

fees, printing and mailing costs, website fees, tax reporting fees, audit fees, license fees and expenses, up to $100,000 per annum in

ordinary legal fees and expenses.

The Sponsor bears expenses in connection with the Trust’s organization and initial offering costs.

The Sponsor is not required

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off-balance sheet arrangements.

Quantitative and Qualitative Disclosures

about Market Risks

We are a smaller reporting

company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this

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-Q

Item 2. Management’s Discussion and Analysis