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Item 1. Financial Statements

2024-11-12 compared with 2024-08-09 · 129 added, 144 removed, 204 unchanged (57% of the section changed)

1 unchanged sentence

INDEX TO FINANCIAL STATEMENTS

Statements of Financial Condition at June 30,

2024 (unaudited) and December 31, 2023

Schedule of Investment at June 30, 2024 (unaudited)

Unaudited Statements of Operations for the three

and six months ended June 30, 2024

Unaudited Statements of Changes in Net Assets

for the three and six months ended June 30, 2024

Statements of Financial Condition at September 30, 2024 (unaudited) and December 31, 2023

Schedule of Investment at September 30, 2024 (unaudited)

Unaudited Statements of Operations for the three and nine months ended September 30, 2024

Unaudited Statements of Changes in Net Assets for the three and nine months ended September 30, 2024

Notes to the Financial Statements (unaudited)

1 unchanged sentence

Statements of Financial Condition

June 30, 2024 (unaudited)

September 30, 2024

December 31, 2023

Investments in bitcoin, at fair value (cost $ 510,179,338 and $ 0 at June 30, 2024 and December 31, 2023, respectively)

$ 518,424,674

Investments in bitcoin, at fair value (cost $ 550,536,777 and $ 0 at

September 30, 2024 and December 31, 2023, respectively)

Sponsor fees payable

Total liabilities

$ 518,313,439

Shares issued and outstanding, no par value, Unlimited shares authorized

Net asset value per Share

The accompanying notes are an integral part

of the financial statements.

The accompanying notes are an integral part of

the financial statements.

CoinShares Valkyrie Bitcoin Fund

Schedule of Investment

June 30, 2024 (a)

September 30, 2024 (a)

% of Net Assets

Investment in bitcoin

$ 510,179,338

$ 518,424,674

Total investment

$ 510,179,338

$ 518,424,674

Other assets and liabilities, net

$ 518,313,439

(a) No comparative schedules

1 unchanged sentence

(b) Represents less than 0.05 % of net assets.

The accompanying notes are an integral part

of the financial statements.

The accompanying notes are an integral part of

the financial statements.

CoinShares Valkyrie Bitcoin Fund

Statements of Operations

the Three Months Ended

For the Three

September 30, 2024

(Unaudited) (a)

the Six Months Ended

September 30, 2024

(Unaudited) (a)

6 unchanged sentences

Net change in unrealized gain (loss) on investment

( 82,428,503 )

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

( 69,451,482 )

Net income (loss)

$ ( 69,741,963 )

Net income (loss) per share

Weighted average number of shares outstanding

(a) No further comparative statements of operations have

been provided as the Trust had not commenced operations as of December 31, 2023.

The accompanying notes are an integral part

of the financial statements.

(a) No further comparative statements of operations have been provided

as the Trust had not commenced operations as of December 31, 2023.

The accompanying notes are an integral part of

the financial statements.

CoinShares Valkyrie Bitcoin Fund

Statements of Changes in Net Assets

June 30, 2024 (Unaudited) (a)

Three Months Ended

September 30, 2024

(Unaudited) (a)

Nine Months Ended

September 30, 2024

(Unaudited) (a)

Net Assets – Opening Balance

1 unchanged sentence

( 54,482,331 )

( 45,702,507 )

Net investment income (loss)

1 unchanged sentence

Net change in unrealized gain (loss) on investment

( 82,428,503 )

Net Assets – Ending Balance

$ 518,313,439

(a) No further comparative statements of changes in net

assets have been provided as the Trust had not commenced operations as of December 31, 2023.

The accompanying notes are an integral part

of the financial statements.

(a) No further comparative statements of changes in net assets have

been provided as the Trust had not commenced operations as of December 31, 2023.

The accompanying notes are an integral part of

the financial statements.

CoinShares Valkyrie Bitcoin Fund

Notes to the Financial Statements (Unaudited)

June 30, 2024

CoinShares Valkyrie Bitcoin Fund, formerly known

as Valkyrie Bitcoin Fund (the “Trust”), was organized as a Delaware statutory trust on January 20, 2021.

September 30, 2024

CoinShares Valkyrie Bitcoin Fund, formerly known as

Valkyrie Bitcoin Fund (the “Trust”), was organized as a Delaware statutory trust on January 20, 2021.

The fiscal year for

10 unchanged sentences

There are an unlimited number of authorized shares.

The investment objective of the Trust is for the

Shares to reflect the performance of the value of a bitcoin as represented by the CME CF Bitcoin Reference Rate - New York Variant (the

“Index”), less the Trust’s liabilities and expenses.

In seeking to achieve its investment objective, the Trust holds

bitcoin and values its Shares daily based on the value of bitcoin as reflected by the Index, which is an independently calculated value

based on an aggregation of executed trade flow of major bitcoin spot exchanges.

The investment objective of the Trust is for the Shares

to reflect the performance of the value of a bitcoin as represented by the CME CF Bitcoin Reference Rate - New York Variant (the “Index”),

less the Trust’s liabilities and expenses.

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

Shares daily based on the value of bitcoin as reflected by the Index, which is an independently calculated value based on an aggregation

of executed trade flow of major bitcoin spot exchanges.

The offering of the Trust’s Shares is registered

with the Securities and Exchange Commission (“SEC”) in accordance with the Securities Act of 1933.

Basis of Presentation and Summary of Significant

Accounting Policies

Basis of Presentation and Summary

of Significant Accounting Policies

The Trust qualifies as an investment company solely

8 unchanged sentences

or (iv) the last day of the fiscal year following the fifth anniversary of its initial public offering.

For as long as the Trust is an emerging growth

company, unlike other public companies, it will not be required to provide an auditor’s attestation report on management’s

assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley

For as long as the Trust is an emerging growth company,

unlike other public companies, it will not be required to provide an auditor’s attestation report on management’s assessment

of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of

or comply with any new audit rules adopted by the PCAOB after April 5, 2012, unless the SEC determines otherwise.

15 unchanged sentences

are recognized in the statement of operations in the period in which the sale occurred or the changes in unrealized occurred.

The Trust utilizes an exchange traded price from

the principal market for bitcoin as of 4:00 p.m.

ET on the Trust’s financial statement measurement date to value the bitcoin held

by the Trust.

The Trust utilizes an exchange traded price from the

principal market for bitcoin as of 4:00 p.m.

ET on the Trust’s financial statement measurement date to value the bitcoin held by

The Sponsor determines in its sole discretion the valuation sources and policies used to prepare the Trust’s financial

11 unchanged sentences

any Participant Agreement) or any actions taken in accordance with the provisions of the Trust Agreement.

The Trustee and any of

the officers, directors, employees and agents of the Trustee shall be indemnified by the Trust as primary obligor and held harmless against

The Trustee and any of the

officers, directors, employees and agents of the Trustee shall be indemnified by the Trust as primary obligor and held harmless against

any loss, damage, liability, claim, action, suit, cost, expense, disbursement (including the reasonable fees and expenses of counsel),

15 unchanged sentences

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

Investment Valuation and Calculation of Net

Asset Value (“NAV”)

GAAP defines fair value

as the price the Trust would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants

Investment Valuation and Calculation

of Net Asset Value (“NAV”)

GAAP defines fair value as

the price the Trust would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants

at the measurement date.

17 unchanged sentences

about the assumptions a market participant would use in valuing the asset or liability and would be based on the best information available.

The following table presents information about

the Trust’s assets and liabilities measured at fair value as of June 30, 2024:

The following table presents information about the

Trust’s assets and liabilities measured at fair value as of September 30, 2024:

$ 569,763,992

3 unchanged sentences

$ 569,763,992

There were no transfers between Level 1 and other Levels for the six months ended June 30, 2024.

A financial instrument’s level within the

fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The availability of

observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of

security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics

particular to the security.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the

market, the determination of fair value requires more judgment.

Accordingly, the degree of judgment exercised in determining fair value

is greatest for instruments categorized in Level 3.

The Trust fair values investments for financial

statement purposes, categorizing those investments using the hierarchy as described above.

The fair value of bitcoin held by the Trust is

determined based on a GAAP-consistent pricing source.

The Trust’s NAV is calculated by subtracting all accrued fees, expenses and

other liabilities from the fair value of its bitcoin and other assets.

The Trust’s NAV per share is calculated by taking the Trust’s

NAV divided by the total amount of Shares outstanding.

There were no transfers

between Level 1 and other Levels for the nine months ended September 30, 2024.

A financial instrument’s level within the fair

value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The availability of observable

inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security,

whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular

to the security.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the

determination of fair value requires more judgment.

Accordingly, the degree of judgment exercised in determining fair value is greatest

for instruments categorized in Level 3.

The Trust fair values investments for financial statement

purposes, categorizing those investments using the hierarchy as described above.

The fair value of bitcoin held by the Trust is determined

based on a GAAP-consistent pricing source.

The Trust’s NAV is calculated by subtracting all accrued fees, expenses and other liabilities

from the fair value of its bitcoin and other assets.

The Trust’s NAV per share is calculated by taking the Trust’s NAV divided

by the total amount of Shares outstanding.

Trust Expenses

The Trust pays to the

Sponsor a Sponsor fee (the “Sponsor Fee”) in accordance with the Trust Agreement.

The Sponsor Fee accrues daily by applying

an annual rate of 0.25 % to the Trust’s bitcoin holdings.

The Sponsor Fee will be payable in bitcoins at such times as determined

in the Sponsor’s sole discretion.

The Trust is not responsible for paying any fees or costs associated with the transfer of bitcoin

to the Sponsor or the sale of bitcoin for costs not included in the Sponsor Fee.

The Trust pays to the Sponsor

a Sponsor fee (the “Sponsor Fee”) in accordance with the Trust Agreement.

The Sponsor Fee accrues daily by applying an annual

rate of 0.25 % to the Trust’s bitcoin holdings.

The Sponsor Fee will be payable in bitcoins at such times as determined in the

Sponsor’s sole discretion.

The Trust is not responsible for paying any fees or costs associated with the transfer of bitcoin to

the Sponsor or the sale of bitcoin for costs not included in the Sponsor Fee.

The Sponsor is obligated

14 unchanged sentences

of Fund Services, serves as the Trust’s cash custodian pursuant to a custody agreement.

Paralel Distributors

LLC (the “Marketing Agent”) serves as the Trust’s marketing agent pursuant to a marketing agent agreement.

Coinbase Custody Trust Company, LLC and BitGo

Paralel Distributors LLC

(the “Marketing Agent”) serves as the Trust’s marketing agent pursuant to a marketing agent agreement.

Coinbase Custody Trust Company, LLC, BitGo

Trust Company, Inc.

(the “Custodians”) are custodians of the Trust.

Creation and Redemption of Creation Units

The Trust issues Shares

on an ongoing basis, but only in one or more blocks of 5,000 Shares (a “Basket”).

and Komainu (Jersey) Limited (the “Custodians”) are custodians of the Trust.

Creation and Redemption of Creation

The Trust issues Shares on

an ongoing basis, but only in one or more blocks of 5,000 Shares (a “Basket”).

The Trust issues Baskets of Shares

to certain authorized participants on an ongoing basis and redeems Shares in Baskets on an ongoing basis from Authorized Participants.

Authorized participants

are the only persons that may place orders to create and redeem Baskets.

Authorized participants must be (1) registered broker-dealers

or other securities market participants, such as banks or other financial institutions, that are not required to register as broker-dealers

Authorized participants are

the only persons that may place orders to create and redeem Baskets.

Authorized participants must be (1) registered broker-dealers or

other securities market participants, such as banks or other financial institutions, that are not required to register as broker-dealers

to engage in securities transactions as described below, and (2) Depository Trust Company participants.

Authorized participants

pay the transfer agent a fee for each order they place to create or redeem one or more Baskets.

In addition, an authorized participant

is required to reimburse the Trust or the Sponsor, as applicable, for any operational processing and brokerage costs, transfers fees,

network fees, stamp taxes and part or all of the spread between the expected bid and offer side of the market related to the bitcoin being

purchased or sold in connection with such order (the “Execution Charges”, and collectively with the Transfer Agent Fee, the

“Transaction Fees”).

Authorized participants pay

the transfer agent a fee for each order they place to create or redeem one or more Baskets.

In addition, an authorized participant is

required to reimburse the Trust or the Sponsor, as applicable, for any operational processing and brokerage costs, transfers fees, network

fees, stamp taxes and part or all of the spread between the expected bid and offer side of the market related to the bitcoin being purchased

or sold in connection with such order (the “Execution Charges”, and collectively with the Transfer Agent Fee, the “Transaction

The Transaction Fees may be reduced, increased or otherwise changed by the Sponsor.

Activity in the number and value of Shares

created and redeemed for the six months ended June 30, 2024 are as follows:

Activity in the number and value of Shares created

and redeemed for the nine months ended September 30, 2024 are as follows:

Number of Shares

2 unchanged sentences

( 54,482,331 )

$ ( 45,702,507 )

Net change in Shares created and redeemed

$ 497,381,563

Investment Transactions

For the six months ended June 30, 2024, the cost

of purchases and proceeds from sales of bitcoin by the Trust, were as follows:

$ 543,007,288

For the nine months ended September 30, 2024, the

cost of purchases and proceeds from sales of bitcoin by the Trust, were as follows:

Related Party Transactions

Certain officers of the

Trust are affiliated with the Sponsor and are not paid any fees by the Trust for serving in such capacities.

Certain officers of the Trust

are affiliated with the Sponsor and are not paid any fees by the Trust for serving in such capacities.

The Initial Sponsor agreed

to waive Sponsor fees for the first three months of the Trust’s operations, through April 10, 2024.

For the six months ended June

For the nine months ended September

30, 2024, the Trust incurred $ 791,603 in Sponsor Fees, of which, $ 156,867 was waived by the Initial Sponsor.

On January 10, 2024,

Valkyrie Funds LLC, at such time an affiliate of the Initial Sponsor, purchased 40,000 Shares at a per-Share price of $ 13.00 .

Delivery of these Shares was made on January 11, 2024.

On January 10, 2024, Valkyrie

Funds LLC, at such time an affiliate of the Initial Sponsor, purchased 40,000 Shares at a per-Share price of $ 13.00 .

of these Shares was made on January 11, 2024.

Total proceeds to the Trust from the sale of these Shares was $ 520,000 .

On March 15, 2024, the

Trust entered into an agreement with CoinShares Co., a Delaware corporation, to act as Co-Sponsor of the Trust in an advisory capacity.

Effective June 14, 2024 (the “Effective Date”), the Initial Sponsor withdrew as Co-Sponsor

to the Trust.

Pursuant to Section 6.9 of the Trust Agreement, on the Effective Date of the Initial Sponsor’s withdrawal as Co-Sponsor

to the Trust, CoinShares Co.

automatically and without further action by the Co-Sponsor, Trustee or the Shareholders (as defined in the

Trust Agreement) became the successor Sponsor and has all the powers, rights, duties and obligations of the Sponsor under the Trust Agreement.

of June 30, 2024, affiliates of the Sponsor own 18,140,000 Shares of the Trust.

On March 15, 2024, the Trust

entered into an agreement with CoinShares Co., a Delaware corporation, to act as Co-Sponsor of the Trust in an advisory capacity.

June 14, 2024 (the “Effective Date”), the Initial Sponsor withdrew as Co-Sponsor to the Trust.

Pursuant to Section 6.9 of

the Trust Agreement, on the Effective Date of the Initial Sponsor’s withdrawal as Co-Sponsor to the Trust, CoinShares Co.

automatically

and without further action by the Co-Sponsor, Trustee or the Shareholders (as defined in the Trust Agreement) became the successor Sponsor

and has all the powers, rights, duties and obligations of the Sponsor under the Trust Agreement.

of September 30, 2024, affiliates of the Sponsor own 18,140,000 Shares of the Trust.

Commitments and Contingencies

6 unchanged sentences

Financial Highlights

The Trust is presenting the following financial

highlights related to investment performance and operations of a Share outstanding for the three months ended June 30, 2024 and the period

from January 10, 2024 (the initial share purchase date) through June 30, 2024.

The Trust is presenting the following financial highlights

related to investment performance and operations of a Share outstanding for the three months ended September 30, 2024 and the period from

January 10, 2024 (the initial share purchase date) through September 30, 2024.

The total return at NAV is based on the change in NAV of

3 unchanged sentences

Financial Highlights (Unaudited)

For the three months ended June 30, 2024 and the

period January 10, 2024 through June 30, 2024

For the three months ended September 30, 2024 and

the period January 10, 2024 through September 30, 2024

Three Months Ended

June 30, 2024

September 30, 2024

Net Asset Value

14 unchanged sentences

(2) Not annualized

(3) Includes voluntary reimbursement of sponsor fees of 0.03 % and 0.09 %

(3) Includes voluntary reimbursement of sponsor

fees of 0.00 % and 0.05 %

Subsequent Events

The Sponsor has evaluated all subsequent events

through the issuance of the financial statements and has noted no events requiring adjustment or additional disclosure in the financial

The Sponsor has evaluated all subsequent events through

the issuance of the financial statements and has noted no events requiring adjustment or additional 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-Q

Item 1. Financial Statements