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Item 8. Financial Statements and Supplementary Data

2025-03-28 compared with 2024-03-27 · 317 added, 209 removed, 58 unchanged (90% of the section changed)

2 unchanged sentences

Report of Independent Registered Public Accounting Firm

Statement of Financial Condition at December 31, 2023

Statement of Operations for the period December 21, 2023 through December 31, 2023

Statement of Changes in Net Assets for the period December 21, 2023 through December 31, 2023

of Cash Flows for the period December 21, 2023 through December 31, 2023

Notes to Consolidated Financial Statements

OF INDEPENDENT AUDITORS

Statements of Financial Condition at December 31, 2024 and 2023

Schedules of Investment at December 31, 2024 and 2023

Statements of Operations for the year ended December 31, 2024 and the period December 21, 2023 (date of seed audit) through December 31, 2023

Statement of Changes in Net Assets for the year ended December 31, 2024 and the period December 21, 2023 (date of seed audit) through December 31, 2023

Notes to Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Sponsor of Valkyrie Bitcoin Fund

the Sponsor and Shareholders of

Valkyrie Bitcoin Fund

on the Financial Statements

have audited the accompanying statement of financial condition of Valkyrie Bitcoin Fund (the “Trust”) as of December 31,

2023, and the related statements of operations, changes in net assets and cash flows, including the related notes, for the period December

21, 2023 (date of seed audit) through December 31, 2023 (collectively referred to as the “financial statements”).

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 operations, changes in its net assets and its cash flows for the period December 21, 2023 (date of seed audit)

through December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

have audited the accompanying statements of financial condition of CoinShares Valkyrie Bitcoin Fund (the “Trust”),

including the schedules of investment, as of December 31, 2024 and 2023, the related statements of operations and changes in net

assets for the year ended December 31, 2024, and for the period from December 21, 2023 (date of seed audit) through December 31,

2023, and 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 and changes in its net assets, for the year ended December 31, 2024, and for the period from December

21, 2023 (date of seed audit) through December 31, 2023, in conformity with accounting principles generally accepted in the United

States of America.

financial statements are the responsibility of the Trust’s management.

Our responsibility is to express an opinion on the Trust’s

financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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.

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.

Accordingly, we express no such opinion.

audit includes performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

Such procedures include examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

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 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 are required to be independent with respect to the Trust in accordance

with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the

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

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.

we express no such opinion.

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 to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our procedures included confirmation of cash and digital assets

owned as of December 31, 2024 and 2023, by correspondence with the custodians.

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

We believe that our audits provide a reasonable basis for our opinion.

have served as the Trust’s auditor since 2023 .

Cohen & Company, Ltd.

& COMPANY, LTD .

Valley, Maryland

March 27, 2025

Valkyrie Bitcoin Fund

of Financial Condition

1 unchanged sentence

December 31, 2023

Commitments and contingent liabilities (Note 7)

Investments in bitcoin, at fair value (cost $ 563,456,383 and $ 0 at December 31, 2024 and December 31, 2023, respectively)

$ 826,306,338

Sponsor fees payable

Total liabilities

$ 826,115,990

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

1 unchanged sentence

accompanying notes are an integral part of the financial statements.

Valkyrie Bitcoin Fund

of Investment

December 31, 2024

% of Net Assets

Investment in bitcoin

$ 563,456,383

$ 826,306,338

Total investment

$ 563,456,383

$ 826,306,338

Other assets and liabilities, net

$ 826,115,990

December 31, 2023

% of Net Assets

Investment in bitcoin

Total investment

Other assets and liabilities, net

(a) Represents less

than 0.05 % of net assets.

accompanying notes are an integral part of the financial statements.

Valkyrie Bitcoin Fund

of Operations

the Period December 21, 2023 (date of seed audit) through December 31, 2023

For the Year Ended

December 31, 2024

Sponsor’s fee

For the Period December 21, 2023 (date of seed audit) through

December 31, 2023 (a)

Sponsor fee (Note 4)

Sponsor fee waiver

Total expenses

Net investment income (loss)

( 1,112,971 )

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

3 unchanged sentences

Net income (loss)

$ 306,959,179

Net income (loss) per share

Weighted average number of shares outstanding

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

accompanying notes are an integral part of the financial statements.

Valkyrie Bitcoin Fund

of Changes in Net Assets

the Period December 21, 2023 (date of seed audit) through December 31, 2023

For the Year Ended

December 31, 2024

Net Assets at December 21, 2023 (date of seed audit)

For the Period December 21, 2023 (date of seed audit) through

December 31, 2023 (a)

Net Assets – Opening Balance

( 112,939,140 )

Net investment income (loss)

Net realized gain (loss) from investments

Net change in unrealized gain (loss) on investments

Net Assets at December 31, 2023

accompanying notes are an integral part of the financial statements.

of Cash Flows

the Period December 21, 2023 (date of seed audit) through December 31, 2023

December 31, 2023

Net cash provided by operating activities:

Cash expenses paid

Increase (Decrease) in cash resulting from operations

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Reconciliation of net income (loss) to net cash provided by operating activities

Net income (loss)

Adjustments to reconcile net income/(loss) to net cash provided by operating activities:

Net realized (gain) loss from investments

Net change in unrealized (gain) loss on investments

Net cash provided by operating activities

( 1,112,971 )

Net realized gain (loss) from investment

Net change in unrealized gain (loss) on investment

Net Assets – Ending Balance

$ 826,115,990

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

accompanying notes are an integral part of the financial statements.

Valkyrie Bitcoin Fund

to the Financial Statements

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

The Trust has not commenced

operations as of December 31, 2023.

The Trust has not commenced investment activities nor issued shares.

There were no receipts or disbursements

of cash since the Trust’s formation.

The Trust did not receive any revenue, capital gains or losses, or incur any expenses during

this time period and therefore, does not have any performance history.

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

The Trust’s sponsor is Valkyrie Digital Assets LLC, a Delaware limited

liability company (the “Sponsor”), which is responsible for the day-to-day administration of the Trust.

The Trust is governed

by the provisions of the Trust agreement (the “Trust Agreement”) executed by the Sponsor and the Trustee.

The Valkyrie Bitcoin

Fund is an exchange-traded fund that issues common shares of beneficial interest (“Shares”) representing units of fractional

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 the Trust is December 31 st .

The trustee is CSC Delaware Trust Company

f/k/a Delaware Trust Company (the “Trustee”).

On June 14, 2024, CoinShares Co., a Delaware corporation (the “Sponsor”),

succeeded Valkyrie Digital Assets LLC, a Delaware limited liability company (the “Initial Sponsor”), as the sponsor

of the Trust.

The Sponsor is responsible for the day-to-day administration of the Trust.

The Trust is governed by the provisions

of the Trust Agreement, as amended (the “Trust Agreement”), executed by the Initial Sponsor and the Trustee.

is an exchange-traded fund that issues common shares of beneficial interest (“Shares”) representing units of fractional

undivided beneficial interests in its net assets.

There are an unlimited number of authorized shares.

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 will hold bitcoin and will value 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.

offering of the Trust’s Shares is registered with the Securities and Exchange Commission (“SEC”) in accordance with

the Securities Act of 1933.

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.

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.

offering of the Trust’s Shares is registered with the Securities and Exchange Commission (“SEC”) in accordance

with the Securities Act of 1933.

of Presentation and Summary of Significant Accounting Policies

Trust qualifies as an 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 Accounting Standards Codification 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.

Trust is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

The Trust will cease to be an “emerging growth company” upon the earliest of (i) it having $1.235 billion or more in annual

revenues, (ii) at least $700 million in market value of Shares being held by non-affiliates, (iii) it issuing more than $1.0 billion

of non-convertible debt over a three-year period or (iv) the last day of the fiscal year following the fifth anniversary of its initial

public offering.

Trust qualifies as an 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 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.

Trust is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS

The Trust will cease to be an “emerging growth company” upon the earliest of (i) it having $1.235 billion

or more in annual revenues, (ii) at least $700 million in market value of Shares being held by non-affiliates, (iii) it issuing

more than $1.0 billion of non-convertible debt over a three-year period or (iv) the last day of the fiscal year following the

fifth anniversary of its initial public offering.

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 2002;

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

the SEC determines otherwise.

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 2002;

or comply with any new audit rules adopted by the PCAOB after April

5, 2012, unless the SEC determines otherwise.

following is a summary of significant accounting policies consistently followed by the Trust in the preparation of financial statements.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of

America (“GAAP”).

Use of Estimates

preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements.

preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect

the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial

Actual results could differ from those estimates.

Investment Transactions

Trust intends to purchase bitcoin upon the creation of Shares and sell bitcoin upon the redemption of Shares.

Transactions will be recorded

on a trade-date basis.

Realized gains (losses) and changes in unrealized gains (losses) on open positions will be determined on a specific

identification basis and will be recognized in the statement of operations in the period in which the sale occurred or the changes in

unrealized occurred.

Trust purchases bitcoin upon the net creation of Shares and sells bitcoin upon the net redemption of Shares.

Transactions are

recorded on a trade-date basis.

Realized gains (losses) and changes in unrealized gains (losses) on open positions are determined

on a specific identification basis and are recognized in the statement of operations in the period in which the sale occurred

or the changes in unrealized occurred.

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 at fair value.

The Sponsor determines in its sole discretion

the valuation sources and policies used to prepare the Trust’s financial statements in accordance with GAAP.

The Trust engages

a third-party vendor to obtain a price from a principal market for bitcoin, which is determined and designated by such third-party

vendor daily based on its consideration of several exchange characteristics, including the volume and frequency of trades.

Indemnifications

Sponsor and its affiliates (“Covered Person”) will be indemnified by the Trust and held harmless against any loss, judgment,

liability, expense incurred or amount paid in settlement of any claim sustained by it in connection with the Covered Person’s activities

for the Trust, without fraud, gross negligence, bad faith, willful misconduct or a material breach of the Trust Agreement on the part

of such indemnified party arising out of or in connection with the performance of its obligations under the Trust Agreement and under

each other agreement entered into by the Sponsor in furtherance of the administration of the Trust (including, without limiting the scope

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

Sponsor and its affiliates (each a “Covered Person”) will be indemnified by the Trust and held harmless against any

loss, judgment, liability, expense incurred or amount paid in settlement of any claim sustained by it in connection with the Covered

Person’s activities for the Trust, without fraud, gross negligence, bad faith, willful misconduct or a material breach of

the Trust Agreement on the part of such indemnified party arising out of or in connection with the performance of its obligations

under the Trust Agreement and under each other agreement entered into by the Sponsor in furtherance of the administration of the

Trust (including, without limiting the scope of the foregoing, any Participant Agreement) or any actions taken in accordance with

the provisions of the Trust Agreement.

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), tax or penalty of any kind and nature whatsoever, arising out of, imposed upon or asserted at any time against

such indemnified person in connection with the performance of its obligations under the Trust Agreement, the creation, operation or termination

of the Trust or the transactions contemplated therein;

provided, however, that neither the Trust nor the Sponsor shall be required to

indemnify any such indemnified person for any such expenses which are a result of the willful misconduct, bad faith or gross negligence

of such indemnified person.

Trust’s maximum exposure under these arrangements is unknown because it involves future potential claims against the Trust, which

cannot be predicted with any certainty.

and held harmless against any loss, damage, liability, claim, action, suit, cost, expense, disbursement (including the reasonable

fees and expenses of counsel), tax or penalty of any kind and nature whatsoever, arising out of, imposed upon or asserted at any

time against such indemnified person in connection with the performance of its obligations under the Trust Agreement, the creation,

operation or termination of the Trust or the transactions contemplated therein;

provided, however, that neither the Trust nor

the Sponsor shall be required to indemnify any such indemnified person for any such expenses which are a result of the willful

misconduct, bad faith or gross negligence of such indemnified person.

Trust’s maximum exposure under these arrangements is unknown because it involves future potential claims against the Trust,

which cannot be predicted with any certainty.

Federal Income Taxes

Sponsor intends to take the position that the Trust will be treated as a grantor trust under the Internal Revenue Code of 1986, as amended.

Sponsor intends to take the position that the Trust will be treated as a grantor trust under the Internal Revenue Code of 1986,

If so qualified, the Trust will not be subject to U.S.

federal income tax to the extent it distributes substantially all of its investment

income and capital gains to shareholders.

federal income tax to the extent it distributes substantially

all of its investment income and capital gains to shareholders.

Therefore, no federal income tax provision is required.

Rather, a pro rata portion of the Trust’s

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

Investment Valuation and Calculation of Net Asset Value (“NAV”)

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.

The Trust’s policy is to value investments held at fair value.

Valuation Measurement:

FASB established a framework for measuring fair value in accordance with GAAP.

Under FASB ASC Topic 820, Fair

Value Measurement, various inputs are used in determining the value of investments.

The inputs or methodology used for valuing investments

are not necessarily an indication of the risk associated with investing in those investments.

The three levels of inputs of the fair

value hierarchy are defined as follows:

a pro rata portion of the Trust’s income, gain, losses and deductions will “flow through” to each beneficial

owner of Shares.

Valuation and Calculation of Net Asset Value (“NAV”)

Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures, provides a single definition of fair value,

a hierarchy for measuring fair value and expanded disclosures about fair value adjustments.

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.

The Trust’s policy is to value its investments at fair value.

inputs are used in determining the fair value of assets and liabilities.

Inputs may be based on independent market data (“observable

inputs”) or they may be internally developed (“unobservable inputs”).

These inputs are categorized into a disclosure

hierarchy consisting of three broad levels for financial reporting purposes.

The level of a value determined for an asset or liability

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

its entirety.

The three levels of the fair value hierarchy are as follows:

1 — Unadjusted quoted prices in active markets for identical assets or liabilities.

2 — Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly

or indirectly.

These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar securities,

interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available;

representing the

Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability and would be based

on the best information available.

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.

Trust intends to fair value investments for financial statement purposes, categorizing those investments using the hierarchy as described

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.

NAV per share is calculated by taking the Trust’s NAV divided by the total amount of Shares outstanding.

Trust Expenses and Organization Costs

Trust will pay to the Sponsor a Sponsor’s fee in accordance with the Trust agreement.

The Sponsor’s fee shall be included

in the Trust agreement prior to the commencement of trading of Shares on the Nasdaq Stock exchange.

The Sponsor’s fee will accrue

daily by applying an annual rate to the Trust’s bitcoin holdings.

As of January 11, 2024, the Sponsor’s fee annual rate is

The Sponsor’s fee will be payable in bitcoins at such times as determined in the Sponsor’s sole discretion.

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.

2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly

or indirectly, including quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that

are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data

by correlation or other means;

3 — Inputs that are unobservable for the asset or liability, including the Trust’s assumptions used in determining

the fair value of investments.

following table presents information about the Trust’s assets and liabilities measured at fair value:

December 31, 2024

$ 826,306,338

Total Investments

$ 826,306,338

Total Investments

(a) The Trust had

not commenced operations as of December 31, 2023.

were no transfers between Level 1 and other Levels for the year ended December 31, 2024.

Trust fair values investments for financial statement purposes, categorizing those investments using the hierarchy as described

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 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 is paid 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.

Sponsor is obligated to assume and pay the following fees and expenses of the Trust:

the Marketing fee, the Administrator fee, the Custodian

fee, the Cash Custodian fee, the Transfer Agent fee, the Trustee fee, applicable license fees, including the licensing fees related to

the Index License Agreement, fees and expenses related to trading of Shares on Nasdaq (including marketing, legal and audit fees and

expenses), legal expenses, audit fees, regulatory fees, including any fees relating to the registration of the Shares with the SEC, printing

and mailing costs and costs of maintaining the Trust’s website.

Sponsor will also pay the costs of the Trust’s organization.

The Trust is not obligated to repay any such costs related to the

Trust’s organization and offering paid by the Sponsor.

the Marketing Agent fee, the Administrator

fee, the Custodian fee, the Cash Custodian fee, the Transfer Agent fee, the Trustee fee, applicable license fees, including the

licensing fees related to the Index License Agreement, fees and expenses related to trading of Shares on Nasdaq (including marketing,

legal and audit fees and expenses), legal expenses, audit fees, regulatory fees, including any fees relating to the registration

of the Shares with the SEC, printing and mailing costs and costs of maintaining the Trust’s website.

Bancorp Fund Services, LLC, doing business as U.S.

Bank Global Fund Services (“Fund Services”), an indirect subsidiary of

Bancorp, intends to serve as the Trust’s fund accountant, fund administrator and the transfer agent of the Trust, pursuant

Bank Global Fund Services (“Fund Services”), an indirect subsidiary

Bancorp, serves as the Trust’s fund accountant, fund administrator and the transfer agent of the Trust, pursuant

to certain fund accounting servicing, fund administration servicing and transfer agent servicing agreements.

Bank N.A., a subsidiary

Bancorp and parent company of Fund Services, intends to serve as the Fund’s cash custodian pursuant to a custody agreement.

Paralel Distributors LLC intends to serve as the Trust’s marketing agent pursuant to a marketing agent agreement.

Custody Trust Company, LLC (the “Custodian”) is the initial custodian and Coinbase, Inc., an affiliate of the Custodian,

is the prime broker of the Trust.

Creation and Redemption of Creation Units

subsidiary of U.S.

Bancorp and parent company of Fund Services, serves as the Trust’s cash custodian pursuant to a custody

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

Custody Trust Company, LLC, BitGo Trust Company, Inc., and Komainu (Jersey) Limited

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

and Redemption of Creation Units

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 intends to redeem Shares in Baskets on an ongoing basis from Authorized

Participants.

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.

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.

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.

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”).

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

Related Party Transactions

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”).

The Transaction Fees may be reduced, increased or otherwise

changed by the Sponsor.

in the number and value of Shares created and redeemed for the year ended December 31, 2024 are as follows:

Number of Shares

Value of Shares

$ 632,095,951

( 5,375,000 )

$ ( 112,939,140 )

Net change in Shares created and redeemed

$ 519,156,811

the year ended December 31, 2024, the cost of purchases and proceeds from sales of bitcoin by the Trust, were as follows:

$ 632,012,875

$ 113,778,687

Party Transactions

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

Commitments and Contingencies

are no commitments or contingencies required to be disclosed as of December 31, 2023.

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

For the year ended December 31, 2024, the Trust incurred $ 1,263,370 in Sponsor Fees, of which, $ 150,399 was waived by the Initial

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.

Total proceeds to the Trust from the sale of these Shares

was $ 520,000 .

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.

to CoinShares Co.

assuming the role of Co-Sponsor and Sponsor, CoinShares Captial Markets (Jersey) Limited, an affiliate of the

Sponsor, served as a Bitcoin Trading Counterparty of the Trust.

In such role, CoinShares Captial Markets (Jersey) Limited fulfilled

orders from the Trust for the purchase and sale of bitcoin.

No orders for the purchase or sale of bitcoin were executed with CoinShares

Captial Markets (Jersey) Limited on or since March 15, 2024, the date on which CoinShares Co.

became a Co-Sponsor to the Trust.

During the period that CoinShares Captial Markets (Jersey) Limited was a Bitcoin Trading Counterparty of the Trust, CoinShares

Captial Markets (Jersey) Limited fulfilled purchase orders with an approximate value of $ 295 million.

of December 31, 2024, affiliates of the Sponsor owned 18,140,000 Shares of the Trust.

and Contingencies

the normal course of business, the Trust may enter into contracts that contain a variety of general indemnification clauses.

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.

Segment Reporting

Trust adopted Financial Accounting Standards Board Update 2023-07, Segment

Reporting (Topic 280) – Improvements to Reportable Segment Disclosures

(“ASU 2023-07”) during the period.

The Trust’s adoption of the new standard impacted financial statement disclosures

only and did not affect the Trust’s financial position or results of operations.

Sponsor acts as the Trust’s Chief Operating Decision Maker (“CODM’) and is responsible for assessing performance

and allocating resources with respect to the Trust.

The CODM has concluded that the Trust operates as a single operating segment

since the Trust has a single investment strategy as disclosed in its prospectus, against which the CODM assesses performance.

The financial information provided to and reviewed by the CODM is presented within the Trust’s financial statements.

Financial Highlights

Trust is presenting the following financial highlights related to investment performance and operations of a Share outstanding

for the period from January 10, 2024 (the initial share purchase date) through December 31, 2024.

As the Trust had not yet commenced

operations before this period, no comparative period is presented.

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

Share during the period and the total return at market value is based on the change in market value of a Share on the Nasdaq Stock

Market, LLC during the period.

An individual investor’s return and ratios may vary based on the timing of capital transactions.

the period January 10, 2024 (initial share purchase date) through December 31, 2024

December 31, 2024

Net Asset Value

Net Asset Value per Share, beginning of period

Net investment income (loss)

Net realized and change in unrealized gain (loss) (4)

Net income (loss)

Net asset value per Share, end of period

Market Value per Share, beginning of period

Market Value per Share, end of period

Ratio to average net assets

Net investment income (loss) (1)

Gross expenses (1)

Net expenses (1)(3)

Total return, at net asset value (2)

Total return, at market value (2)

(1) Annualized

(2) Not annualized

(3) Includes voluntary

reimbursement of sponsor fees of 0.03 %

(4) The amount reported

represents a balancing figure derived from the other amounts in the financial highlights table that captures all other changes affecting

net asset value per share for a Share outstanding and may not correlate to aggregate net realized and change in unrealized gain (loss)

on investment presented on the Statement of Operations for the period due to the timing of Share transactions in relation to the fluctuating

fair value of the Trust’s underlying investment.

Subsequent Events

Trust commenced operations on January 11, 2024 .

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

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.

In connection with adding CoinShares Co.

as Co-Sponsor of the Trust, the Trust Agreement was amended.

is a wholly owned subsidiary of CoinShares International Limited, a Jersey company.

Sponsor has evaluated all subsequent events through the issuance of the financial statements and has noted no other events requiring

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.

On January 10, 2024, Valkyrie Funds LLC, an affiliate of the Sponsor, purchased 40,000 Shares at a per-Share price of $ 13.00 (the “Seed

Shares”) in a transaction exempt from registration under Section 4(a)(2) of the 1933 Act.

Delivery of the Seed Shares was made on

January 11, 2024.

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

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

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 8. Financial Statements and Supplementary Data