Invesco Galaxy Bitcoin ETF 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. Index to Financial Statements Documents Page Report of Management on Internal Control Over Financial Reporting 44 Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 46 Statements of Financial Condition as of December 31, 2024 and 2023 47 Schedule of Investments as of December 31, 2024 48 Statement of Income and Expenses for the Year Ended December 31, 2024 49 Statement of Changes in Shareholders' Equity for the Year Ended December 31, 2024 50 Statement of Changes in Shareholder's Equity for the Period December 20, 2023 to December 31, 2023 51 Statements of Cash Flows for the Year Ended December 31, 2024 and the Period December 20, 2023 to December 31, 2023 52 Notes to Financial Statements 53 44 Report of Management on Internal Control Over Financial Reporting Management of Invesco Capital Management LLC, as sponsor (the “Sponsor”) of the Invesco Galaxy Bitcoin ETF (the “Trust”), is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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 U.S. generally accepted accounting principles. 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 inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We, Brian Hartigan, Principal Executive Officer, and Kelli Gallegos, Principal Financial and Accounting Officer, Investment Pools, of the Sponsor, assessed the effectiveness of the Trust’s internal control over financial reporting as of December 31, 2024. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated Framework (2013). Based on our assessment and those criteria, we have concluded that the Trust maintained effective internal control over financial reporting as of December 31, 2024. By: / S / B RIAN H ARTIGAN Name : Brian Hartigan Title: Principal Executive Officer By: / S / KELLI GALLEGOS Name: Kelli Gallegos Title: Principal Financial and Accounting Officer, Investment Pools February 27, 2025 45 Report of Independent Registered Public Accounting Firm To the Board of Managers of Invesco Capital Management LLC (as Sponsor of Invesco Galaxy Bitcoin ETF) and Shareholders of Invesco Galaxy Bitcoin ETF Opinion on the Financial Statements We have audited the accompanying statements of financial condition of Invesco Galaxy Bitcoin ETF (the “Trust) as of December 31, 2024 and 2023, including the schedule of investments as of December 31, 2024, and the related statement of income and expenses for the year ended December 31, 2024, and the statements of changes in shareholders’ equity and of cash flows for the year ended December 31, 2024 and for the period December 20, 2023 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 its cash flows for the year ended December 31, 2024 and for the period December 20, 2023 through December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These 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 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 PCAOB. We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits 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 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 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. /s/ PricewaterhouseCoopers LLP Chicago, Illinois February 27, 2025 We have served as the Trust’s auditor since 2023. 46 Invesco Galaxy Bitcoin ETF Statements of Financial Condition December 31, 2024 and 2023 December 31, December 31, 2024 2023 Assets Investments in Bitcoin, at value (cost $ 381,198,226 as of December 31, 2024) $ 727,789,330 $ — Cash held by custodian — 100,000 Total Assets $ 727,789,330 $ 100,000 Liabilities Payable for: Accrued Sponsor's fees $ 177,497 $ — Total Liabilities $ 177,497 $ — Commitments and Contingencies (Note 9) Net Assets $ 727,611,833 $ 100,000 Net assets consist of: Paid-in-capital $ 321,367,689 $ 100,000 Distributable earnings (loss) 406,244,144 — $ 727,611,833 $ 100,000 Shares outstanding 7,800,000 4,000 Net asset value per share $ 93.28 $ 25.00 Market value per share $ 93.22 $ 25.00 See accompanying Notes to Financial Statements which are an integral part of the financial statements. 47 Invesco Galaxy Bitcoin ETF Schedule of Investments December 31, 2024 Description Quantity Cost Fair Value % of Net Assets Cryptocurrency Bitcoin 7,793 $ 381,198,226 $ 727,789,330 100.02 % Total Investments 7,793 $ 381,198,226 $ 727,789,330 100.02 % Other Assets Less Liabilities $ ( 177,497 ) ( 0.02 )% Net assets $ 727,611,833 100.00 % See accompanying Notes to Financial Statements which are an integral part of the financial statements. 48 Invesco Galaxy Bitcoin ETF Statement of Income and Expenses For the Year Ended December 31, 2024 2024 Income Total Income $ — Expenses Sponsor Fees 1,200,055 Total Expenses 1,200,055 Less: Waivers ( 480,739 ) Net Expenses 719,316 Net Investment Income (Loss) ( 719,316 ) Net Realized and Net Change in Unrealized Gain (Loss) Net Realized Gain (Loss) from Investments in Bitcoin Sold to Pay Sponsor Fee ( 25,357 ) Investments in Bitcoin Sold for Redemptions 60,297,713 Net Realized Gain (Loss) 60,272,356 Net Change in Unrealized Gain (Loss) from Investments in Bitcoin 346,591,104 Net Realized and Net Change in Unrealized Gain (Loss) from Investments in Bitcoin 406,863,460 Net Income (Loss) $ 406,144,144 See accompanying Notes to Financial Statements which are an integral part of the financial statements. 49 Invesco Galaxy Bitcoin ETF Statement of Changes in Shareholders’ Equity For the Year Ended December 31, 2024 Total Shares Shareholders' Equity Balance at December 31, 2023 4,000 $ 100,000 Purchases of Shares 14,145,000 724,834,191 Redemption of Shares ( 6,349,000 ) ( 403,466,502 ) Net Increase (Decrease) due to Share Transactions 7,796,000 321,367,689 Net Income (Loss) Net Investment Income (Loss) ( 719,316 ) Net Realized Gain (Loss) from Investments in Bitcoin Sold for Sponsor Fee and Redemptions 60,272,356 Net Change in Unrealized Gain (Loss) from Investments in Bitcoin 346,591,104 Net Income (Loss) 406,144,144 Net Change in Shareholders' Equity 7,796,000 727,511,833 Balance at December 31, 2024 7,800,000 $ 727,611,833 See accompanying Notes to Financial Statements which are an integral part of the financial statements. 50 Invesco Galaxy Bitcoin ETF Statement of Changes in Shareholder's Equity For the Period December 20, 2023 to December 31, 2023 Shares Total Shares Total Equity Shareholder's Equity Balance at December 20, 2023 — $ — $ — Purchases of Shares 4,000 100,000 100,000 Redemption of Shares — — — Net Increase (Decrease) due to Share Transactions 4,000 100,000 100,000 Net Income (Loss) Net Investment Income (Loss) — — Net Realized Gain (Loss) on Investments in Bitcoin — — Net Change in Unrealized Gain (Loss) on Investments in Bitcoin — — Net Income (Loss) — — Net Change in Shareholders' Equity 4,000 100,000 100,000 Balance at December 31, 2023 4,000 $ 100,000 $ 100,000 See accompanying Notes to Financial Statements which are an integral part of the financial statements. 51 Invesco Galaxy Bitcoin ETF Statements of Cash Flows For the Year Ended December 31, 2024 and the Period December 20, 2023 to December 31, 2023 2024 2023 Cash flows from operating activities: Net Income (Loss) $ 406,144,144 $ — Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Cost of bitcoin purchased ( 670,540,520 ) — Proceeds from bitcoin sold to pay Sponsor Fee 541,819 — Proceeds from bitcoin sold for redemptions 349,072,831 — Net Realized (Gain)/Loss from Investments in Bitcoin Sold to pay Sponsor Fee 25,357 — Net Realized (Gain)/Loss from Investments in Bitcoin Sold for Redemptions ( 60,297,713 ) — Net Change in Unrealized (Gain)/Loss from Investments in Bitcoin ( 346,591,104 ) — Change in operating assets and liabilities: Accrued Sponsor's fees 177,497 — Net cash provided by (used in) operating activities ( 321,467,689 ) — Cash flows from financing activities: Proceeds from purchases of Shares 724,834,191 100,000 Redemption of Shares ( 403,466,502 ) — Net cash provided by (used in) financing activities 321,367,689 100,000 Net change in cash ( 100,000 ) 100,000 Cash at beginning of period 100,000 — Cash at end of period $ — $ 100,000 See accompanying Notes to Financial Statements which are an integral part of the financial statements. 52 Invesco Galaxy Bitcoin ETF Notes to Financial Statement s December 31, 2024 Note 1 – Organization Invesco Galaxy Bitcoin ETF (the “Trust”) is a Delaware statutory trust, formed on April 5, 2021 pursuant to the Delaware Statutory Trust Act (the “DSTA”). The Trust continuously issues common shares representing fractional undivided beneficial interest in and ownership of the Trust (“Shares”). The Trust operates pursuant to its Second Amended and Restated Declaration of Trust and Trust Agreement, dated as of January 5, 2024 (the “Trust Agreement”). Delaware Trust Company, a Delaware trust company, is the Delaware trustee of the Trust (the “Trustee”). The Trust is managed and controlled by Invesco Capital Management LLC (the “Sponsor”). The Trust offers Shares only to certain eligible financial institutions (“Authorized Participants”) in one or more blocks of 5,000 Shares (“Creation Baskets”) based on the quantity of bitcoin attributable to each Share of the Trust. The Trust has an unlimited number of shares authorized for issuance. On December 20, 2023, Invesco Ltd. (in such role, the “Seed Capital Investor”), subject to certain conditions, purchased 4,000 Shares in exchange for $ 100,000 , which comprised the initial purchase of the Trust’s Shares (“Initial Seed Shares”). Through December 31, 2023, the Trust had no operations other than those related to its organization and registration and the sale of Shares to the Seed Capital Investor. As a result, the Statement of Operations was omitted for December 31, 2023. As of December 31, 2023, the Seed Capital Investor owned one hundred percent of the outstanding Shares. On January 2, 2024, the Seed Capital Investor purchased an additional 200,000 Shares at a per-Share price of $ 25.00 (“Seed Creation Baskets”). Total proceeds to the Trust from the sale of the Initial Seed Shares and the Seed Creation Baskets were $ 5,100,000 . On January 4, 2024, the Sponsor redeemed the Initial Seed Shares and the Seed Creation Baskets for cash at a per-Share price of $ 25.00 for a total redemption value of $ 5,100,000 and immediately created 110,000 Shares ( 22 Creation Baskets) at a price of $ 44.16305 per Share based on the price of the Lukka Prime Bitcoin Reference Rate (the “Benchmark”) as of 4:00 p.m. ET on January 4, 2024. The Benchmark is designed to provide an estimated fair market value price for bitcoin, based on the execution price of bitcoin on its principal market. The price of the Shares acquired by the Seed Capital Investor was determined based on the price of the Benchmark. The Seed Capital Investor no longer held Shares as of December 31, 2024. Effective January 10, 2024, the Trust’s registration statement was declared effective by the U.S. Securities and Exchange Commission (the “SEC”). The Trust commenced trading on the Cboe BZX Exchange, Inc. (the “Exchange”) on January 11, 2024. The Trust’s investment objective is to reflect the performance of the spot price of bitcoin as measured using the Benchmark, less the Trust’s expenses and other liabilities. The Shares are intended to provide institutional and retail investors with a simple, cost-effective means of gaining investment benefits similar to those of holding bitcoin. In seeking to achieve its investment objective, the Trust will hold bitcoin. Coinbase Custody Trust Company, LLC (the “Bitcoin Custodian”) will hold all of the Trust’s bitcoin on the Trust’s behalf as bitcoin custodian. The Bank of New York Mellon (“BNYM”), the Trust’s “Administrator,” calculates, and the Sponsor publishes, the Trust’s Net Asset Value (“NAV”) once each business day. To calculate the NAV, the Administrator totals the current market value of bitcoin in the Trust and any other assets, and subtracts any liabilities including accrued but unpaid expenses. The Trust’s NAV is an amount denominated in U.S. dollars. This Annual Report (the “Report”) covers the twelve months ended December 31, 2024 and the period beginning December 20, 2023 to December 31, 2023 . Note 2 – Summary of Significant Accounting Policies A. Basis of Presentation The financial statements of the Trust have been prepared using U.S. GAAP. The Trust is considered an investment company under U.S. GAAP for financial statement purposes and follows the accounting and reporting guidance applicable to investment companies in 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, under the Investment Company Act of 1940, as amended. B. Accounting Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements. Actual results could differ from those 53 estimates. In addition, the Trust monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are issued. C. Crypto Assets 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”). The issuance 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. Adoption of the new standard had no material impact on the Trust's financial statements. See Note 2 - Summary of Significant Accounting Policies - F. Investment Valuations for more information on the Trust's valuation practices . D. Segment Reporting In November 2023, the FASB issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), with the intent of improving reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand the components of a segment's profit or loss and assess potential future cash flows for each reportable segment and the entity as a whole thereby enabling better understanding of how an entity's segments impact overall performance. The Trust represents a single operating segment. Subject to the oversight and, when applicable, approval of the Board of Managers, the Trust's Sponsor acts as the Trust's chief operating decision maker (“CODM”), assessing performance and making decisions about resource allocation within the Trust. The CODM monitors the operating results as a whole and the Trust's long-term strategic asset allocation is determined in accordance with the terms of its prospectus based on a defined investment strategy. The financial information provided to and reviewed by the CODM is consistent with that presented in the Trust's financial statements. Adoption of the new standard impacted the Trust's financial statement note disclosures only and did no t affect the Trust's financial position or the results of its operations. E. Cash and Cash Equivalents The Trust defines cash as cash held by the Cash Custodian (as defined below). There were no cash equivalents held by the Trust as of December 31, 2024 . F. Investment Valuations The Trust applies FASB ASC Topic 820, Fair Value Measurement , in the valuation of bitcoin held by the Trust and for financial statement purposes. The fair market value price for bitcoin reflects the price that would be received for bitcoin in a current sale, which assumes an orderly transaction between market participants on the measurement date of bitcoin on its “principal market,” generally, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. The Trust determines its principal market (or in the absence of a principal market the most advantageous market) on a periodic basis to determine which market is its principal market for the purpose of calculating fair value for the creation of quarterly and annual financial statements. Issuer-specific events, market trends, bid/asked quotes of brokers and information providers and other data may be reviewed in the course of making a good faith determination of a security’s fair value. G. Investment Transactions Bitcoin transactions are accounted for on a trade date basis. Realized gains or losses from the sale or disposition of bitcoin are determined on a specific identification basis and recognized in the Statements of Income and Expenses in the period in which the sale or disposition occurs, respectively. H. Routine Operational, Administrative and Other Ordinary Expenses The Sponsor is responsible for all routine operational, administrative and other ordinary expenses of the Trust, including, but not limited to, the Trustee’s fees, the fees of the BNYM (the Administrator and the “Transfer Agent”) (for its services as the Administrator, Transfer Agent, and Cash Custodian (defined herein)), the fees of the Bitcoin Custodian, the fees of Galaxy Digital Funds LLC (the “Execution Agent”), Exchange listing fees, SEC registration fees, printing and mailing costs, legal costs and audit fees. The Trust does not reimburse the Sponsor for the routine operational, administrative and other ordinary expenses of the Trust. Accordingly, such expenses are not reflected in the Statements of Income and Expense of the Trust. I. Non-Recurring Fees and Expenses In certain cases, the Trust will pay for some expenses in addition to the Sponsor Fee. These exceptions include expenses not assumed by the Sponsor (i.e., expenses other than those identified in Section H of this Note 2), litigation and indemnification 54 expenses, judgments, transactional expenses, taxes and other expenses not expected to be incurred in the ordinary course of the Trust’s business. The only expenses of the Trust during the year ended December 31, 2024 were the Sponsor Fee. J. Federal Income Taxes The Sponsor intends to take the position that the Trust is properly treated as a grantor trust for U.S. federal income tax purposes. Assuming that the Trust is a grantor trust, the Trust will not be subject to U.S. federal income tax and, therefore, no provision for federal income taxes is required. Rather, if the Trust is a grantor trust, 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. Note 3 – Concentration Risk Unlike other funds that may invest in diversified assets, the Trust’s investment strategy is concentrated in a single asset: bitcoin. This concentration maximizes the degree of the Trust’s exposure to a variety of market risks associated with bitcoin, including the rise or fall in its price, sometimes rapidly or unexpectedly. By concentrating its investment strategy solely in bitcoin, any losses suffered as a result of a decrease in the value of bitcoin can be expected to reduce the value of an interest in the Trust proportionately and will not be offset by other gains if the Trust were to invest in underlying assets that were diversified. There is no assurance that bitcoin will maintain its long-term value in terms of purchasing power in the future. In the event that the price of bitcoin declines, the Sponsor expects the value of an investment in the Shares to decline proportionately. Each of these events could have a material effect on the Trust’s financial position and the results of its operations. Note 4 – Service Providers and Related Party Agreements The Trustee Delaware Trust Company, a Delaware trust company, acts as the Trustee of the Trust as required to create a Delaware statutory trust in accordance with the Trust Agreement and the DSTA. Under the Trust Agreement, the duties of the Trustee are limited to (i) accepting legal process served on the Trust in the State of Delaware and (ii) at the direction of the Sponsor, the execution of any certificates required to be filed with the Secretary of State of the State of Delaware which the Trustee is required to execute under the DSTA. The Sponsor Invesco Capital Management LLC is the Sponsor of the Trust. The Sponsor arranged for the creation of the Trust and is responsible for the ongoing registration of the Shares for their public offering, the listing of Shares on the Exchange and valuing the bitcoin held by the Trust. The Sponsor is a limited liability company formed in the state of Delaware on February 7, 2003, and is a wholly-owned subsidiary of Invesco Ltd. Invesco Ltd. and its subsidiaries, including the Sponsor, are an independent global investment management group. The Trust pays the Sponsor a unified fee (the “Sponsor Fee”) in an amount equal to 0.25 % per annum of the daily total net assets of the Trust as compensation for services performed under the Trust Agreement. The Trust's only ordinary recurring expense is the Sponsor Fee. The Sponsor Fee is accrued daily and paid monthly in arrears on the first Business Day of the month in U.S. dollars, and will be calculated by the Administrator. The Sponsor also paid the costs of the Trust’s organization. From January 9, 2024 until January 28, 2024, the Sponsor Fee was 0.39 % per annum. Prior to January 9, 2024, the Sponsor Fee was 0.59 % per annum. For a 6-month period commencing on the day the Trust’s Shares were initially listed on the Exchange (January 11, 2024), the Sponsor waived the Sponsor Fee on the first $ 5 billion of Trust assets. Effective July 11, 2024, this waiver expired, and the Sponsor is no longer waiving the Sponsor Fee. To cover the Sponsor Fee, and extraordinary expenses not assumed by the Sponsor, the Sponsor or its delegate will cause the Trust (or its delegate) to instruct the Execution Agent to convert bitcoin held by the Trust into U.S. dollars. Extraordinary expenses include, but are not limited to, taxes and governmental charges, any applicable brokerage commissions, financing fees, Bitcoin network fees and similar transaction fees, 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 (including, for example, in connection with any fork of the Bitcoin blockchain), any indemnification of the Sponsor, Cash Custodian, Bitcoin Custodian, Administrator or other agents, service providers or counterparties of the Trust and extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters. The NAV of the Trust and the number of bitcoins represented by a Share will decline each time the Trust accrues the Sponsor Fee or any Trust expenses not assumed by the Sponsor. The Trust is not responsible for paying any costs associated with the transfer of bitcoin to or from the Trust in connection with paying the Sponsor Fee or in connection with creation and redemption transactions. The Sponsor waived fees of $ 480,739 for the year ended December 31, 2024. 55 The Administrator BNYM serves as the Trust’s Administrator. Under the trust administration and accounting agreement, the Administrator provides necessary administrative, tax and accounting services and financial reporting for the maintenance and operations of the Trust, including calculating the NAV of the Trust and the net assets of the Trust. The Transfer Agent BNYM also serves as the Transfer Agent for the Trust. The Transfer Agent is responsible for (1) issuing and redeeming Shares, (2) responding to correspondence by Shareholders and others relating to its duties, (3) maintaining Shareholder accounts and (4) making periodic reports to the Trust. The Bitcoin Custodian Coinbase Custody Trust Company, LLC serves as the Trust’s Bitcoin Custodian. Under the custodial agreement, the Bitcoin Custodian is responsible for (1) safekeeping all of the bitcoin owned by the Trust, (2) opening an account that holds the Trust’s bitcoin and (3) facilitating the transfer of bitcoin required for the operation of the Trust, as directed by the Sponsor. The Bitcoin Custodian is chartered as a limited purpose trust company by the New York State Department of Financial Services (“NYSDFS”) and is authorized by the NYSDFS to provide digital asset custody services. The Bitcoin Custodian is a wholly-owned subsidiary of Coinbase Global, Inc. The Cash Custodian BNYM serves as the Trust’s Cash Custodian. Under the Cash Custody Agreement, BNYM is responsible for holding the Trust’s cash in connection with creation and redemption transactions effected in cash (the “Cash Custodian”). The Cash Custodian is a New York state-chartered bank and a member of the Federal Reserve System. The Marketing Agent Invesco Distributors, Inc. (the “Marketing Agent”) is responsible for: (1) working with the Transfer Agent to review and approve, or reject, purchase and redemption orders of Creation Baskets placed by Authorized Participants with the Transfer Agent; and (2) reviewing and approving the marketing materials prepared by the Trust for compliance with applicable SEC and Financial Industry Regulatory Authority advertising laws, rules, and regulations. The Execution Agent The Sponsor has entered into an agreement with Galaxy Digital Funds LLC, a subsidiary of Galaxy Digital LP (“Galaxy”), to serve as Execution Agent. The Trust from time to time will be required to sell bitcoin in such quantities as necessary to permit payment of the Sponsor Fee and any Trust expenses and liabilities not assumed by the Sponsor. The Sponsor has engaged the Execution Agent to sell bitcoin on the Trust’s behalf in such circumstances. The Sponsor or its delegate will cause the Trust (or its delegate) to instruct the Execution Agent to sell bitcoin at approximately the price at which it is valued by the Trust and in the smallest amounts required to permit such payments as they become due, with the intention of minimizing the Trust’s holdings of assets other than bitcoin. Accordingly, the amount of bitcoin to be sold may vary from time to time depending on the level of the Trust’s expenses and liabilities and the market price of bitcoin. The Trust also may utilize the services of the Execution Agent to purchase or sell bitcoin in connection with cash creations and redemptions. In addition, as part of this agreement, the Execution Agent has agreed to co-brand and co-market the Trust, and the Sponsor has licensed the use of certain Galaxy trademarks, service marks and trade names in connection with the Trust. Galaxy is a subsidiary of Galaxy Digital Holdings LP (“Galaxy Holdings”). Galaxy Digital Holdings Ltd., which holds a limited partner interest in Galaxy Holdings, is listed on the Toronto Stock Exchange under the symbol “GLXY.” Note 5 – Organization and Offering Costs The Sponsor has agreed to pay the organizational and initial offering costs of the Trust and the Trust will not be obligated to reimburse the Sponsor. The organizational and initial offering costs include preparation and filing of incorporation documents, bylaws, declarations of trust, registration statements, board materials, state and federal registration of shares and audit fees. As a result, the Trust’s financial statements do not reflect these organizational and offering costs. Note 6 – Additional Valuation Information U.S. GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. U.S. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices 56 are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods or market conditions may result in transfers in or out of an investment’s assigned level: Level 1: Prices are determined using quoted prices in an active market for identical assets. Level 2: Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. Level 3: Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Trust’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. As of December 31, 2024 , the investments in this Trust were valued based on Level 1 inputs. The levels assigned to the investment valuations may not be an indication of the risk or liquidity associated with investing in those investments. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments. Note 7 – Investments in Bitcoin The Trust expects to purchase or sell bitcoin in connection with cash creation or redemption transactions, and may sell bitcoin to pay certain expenses, including the Sponsor Fee. The following is a summary of the transactions in, and earnings from, investments in bitcoin for the year ended December 31, 2024. Fair Value Opening Balance as of 12/31/2023 $ — Purchases at Cost 670,540,520 Proceeds from Sales to Pay Sponsor Fee ( 541,819 ) Proceeds from Sales to Redemptions ( 349,072,831 ) Change in Unrealized Appreciation (Depreciation) 346,591,104 Net Realized (Gain) Loss from Investments in Bitcoin Sold to pay Sponsor Fee ( 25,357 ) Net Realized (Gain) Loss from Investments in Bitcoin Sold for Redemptions 60,297,713 Ending Balance as of 12/31/2024 $ 727,789,330 Note 8 – Share Purchases and Redemptions The Trust will process all creations and redemptions of Shares in transactions with Authorized Participants. When the Trust issues or redeems its Shares, it will do so only in Creation Baskets based on the quantity of bitcoin attributable to each Share of the Trust (net of accrued but unpaid Sponsor fees and any accrued but unpaid expenses or liabilities). Creation and redemption transactions take place in cash, but in the future, pending regulatory approval, the Trust may permit or require creation and redemption transactions to take place in-kind. Authorized Participants are the only persons that may place orders to create and redeem Creation 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) participants in DTC such as banks, dealers and trust companies (“DTC Participants”). To become an Authorized Participant, a person must enter into an Authorized Participant Agreement. When purchasing Creation Baskets, Authorized Participants will deliver cash to the Cash Custodian. The Execution Agent will be responsible for acquiring the requisite amount of bitcoin on behalf of the Trust on an agency basis. After receipt of the bitcoin by the Bitcoin Custodian, the Transfer Agent will issue Creation Baskets of Shares to the creating Authorized Participant in satisfaction of the creation order. When redeeming Creation Baskets, the Execution Agent will be responsible for selling the requisite amount of bitcoin on behalf of the Trust on an agency basis. After receipt of the cash payment, the Transfer Agent will redeem the Shares and the Cash Custodian will distribute the resulting cash to the redeeming Authorized Participant in satisfaction of the redemption order. Note 9 – Commitments and Contingencies The Sponsor, either in its own capacity or in its capacity as the Sponsor and on behalf of the Trust, has entered into various service agreements that contain a variety of representations, or provide indemnification provisions related to certain risks service providers undertake in performing services for the Trust. The Trust’s organizational documents provide for the Trust to indemnify the Sponsor and any affiliate of the Sponsor that provides services to the Trust to the maximum extent permitted by applicable law, subject to certain exceptions for disqualifying conduct by the Sponsor or such an affiliate. The Trust’s maximum exposure under these 57 arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Further, the Trust has not had prior claims or losses pursuant to these contracts. 58 Note 10 – Financial Highlights The Trust is presenting the following NAV and financial highlights related to investment performance for a Share outstanding for the period January 10, 2024 to December 31, 2024. An individual investor’s return and ratios may vary based on the timing of capital transactions. NAV per Share is the NAV of the Trust divided by the number of outstanding Shares at the date of each respective period presented. For the Period January 10, 2024 (the effective date of the Trust's registration statement) to December 31, 2024 Net Asset Value Net asset value per Share, beginning of period $ 46.65 Net realized and change in unrealized gain (loss) on investments in Bitcoin (a) 46.73 Net investment income (loss) (b) ( 0.10 ) Net income (loss) 46.63 Net asset value per Share, end of period (c) $ 93.28 Market value per Share, beginning of period (d) $ 46.30 Market value per Share, end of period (d) $ 93.22 Ratio to average Net Assets (e) Net investment income (loss) ( 0.15 )% Expenses, after waivers 0.15 % Expenses, prior to waivers 0.25 % Total Return, at net asset value (f)(g) 99.96 % Total Return, at market value (f)(g) 101.34 % (a) Net realized and change in unrealized gain (loss) on investments in Bitcoin per share may not correlate with the Trust's net realized and unrealized gain (loss) due to timing of shareholder transactions in relation to the fluctuating market values of the Trust's investments. (b) Based on average shares outstanding. (c) For financial reporting purposes, the Trust values transactions based upon the end of reporting period price in the market. Accordingly, the investment valuations in these financial statements may differ from those used in the calculation of certain of the Trust’s final creation and redemption NAVs. (d) The mean between the last bid and ask prices. (e) Annualized. (f) Total Return, at NAV is calculated assuming an initial investment made at the NAV at the beginning of the period, reinvestment of all dividends and distributions at NAV during the period, and redemption of Shares at NAV on the last day of the period. Total Return, at NAV includes adjustments in accordance with U.S. GAAP and as such, the NAV for financial reporting purposes and the returns based upon those NAVs may differ from the NAVs and returns for shareholder transactions. Total Return, at market value is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at market value during the period, and redemption of Shares at the market value on the last day of the period. Not annualized for periods less than one year, if applicable. (g) The net asset value total return from January 1, 2024 to December 31, 2024 was 273.12 %. The market price total return from January 1, 2024 to December 31, 2024 was 272.88 % . 59 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.