WisdomTree Bitcoin Fund 10-K

ITEM 9A. CONTROLS AND PROCEDURES Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures The Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its 1934 Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Principal Executive Officer and Principal Financial Officer of the Sponsor to allow timely decisions regarding required disclosure. Under the supervision and with the participation of the Principal Executive Officer and the Principal Financial Officer of the Sponsor, the Sponsor conducted an evaluation of the Trust’s disclosure controls and procedures, as defined under 1934 Act Rule 13a-15(e). Based on this evaluation, the Principal Executive Officer and the Principal Financial Officer of the Sponsor concluded that, as of December 31, 2023, the Trust’s disclosure controls and procedures were effective. 90 Management’s Report on Internal Control over Financial Reporting; Attestation Report of the Registered Public Accounting Firm This annual report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the company’s registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies. Changes in Internal Control Over Financial Reporting There was no change in the Trust’s internal controls over financial reporting that occurred during the Trust’s most recently completed fiscal quarter ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, these internal controls. ITEM 9B. OTHER INFORMATION None . ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 91 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE The Trust does not have any directors, officers or employees. The Sponsor has arranged for the creation and operation of the Trust. The following persons serve in the below capacities on behalf of the Sponsor: Name and Year of Birth Position(s) Held with the Sponsor Length of Time Served Principal Occupation(s) During the Past Five Years Jeremy Schwartz (1981) Chief Executive Officer March 2021-Present Global Chief Investment Officer for WisdomTree since 2021, Global Head of Research from 2018 to 2021 and Director of Research from 2008 to 2018. David Castano (1971) Chief Financial Officer and Treasurer March 2021-Present Head of Fund Accounting & Administration, WisdomTree Asset Management, Inc. since 2020; Director of Fund Accounting & Administration, WisdomTree Asset Management, 2011 to 2020. Ryan Louvar (1972) Chief Legal Officer and Secretary March 2021-Present Chief Legal Officer and Head of Business and Legal Affairs, WisdomTree Digital+, since 2021; General Counsel, WisdomTree Asset Management, Inc., 2013 to 2021. + WisdomTree Digital refers to the separate division within WisdomTree and its affiliates commencing in 2021 and includes the separate advisory subsidiary, WisdomTree Digital Management, Inc. commencing in 2022, and money services subsidiary, WisdomTree Digital Movement, Inc., commencing in 2023. The Sponsor has a code of conduct (the “Code of Conduct”) that applies to those personnel of the Sponsor whose regular functions or duties involve making, participating in, or obtaining information regarding the purchase or sale of bitcoin by the Trust, and requires pre-clearance of transactions in bitcoin by such persons in excess of certain de minimis amounts. The Code of Conduct is available free of charge upon written request sent to the Sponsor at 250 West 34th Street, 3rd Floor, New York, NY 10119. ITEM 11. EXECUTIVE COMPENSATION The Trust has no employees, officers or directors and is managed by the Sponsor. None of the directors or officers of the Sponsor receive compensation from the Trust. The Trust pays the Sponsor a Sponsor Fee of 0.25%. The Sponsor Fee is calculated on a daily basis (accrued at 1/365 , or 1/366 in a leap year, of the applicable percentage of the NAV on that day) and paid on a monthly basis. For a six-month period commencing on January 11, 2024 (the day the Shares were initially listed on the Exchange) and ending on July 11, 2024, the Sponsor will waive the entire Sponsor Fee for the first $1.0 billion of the Trust’s assets. The Sponsor may, in its sole discretion and from time to time, waive all or a portion of the Sponsor Fee for stated periods of time. For the fiscal period ended December 31, 2023, no Sponsor Fee was incurred by the Trust because the Trust did not commence operations prior to January 11, 2024. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Securities Authorized for Issuance under Equity Compensation Plans Not applicable. 92 Security Ownership of Certain Beneficial Owners and Management The Trust has no officers or directors. There are no persons known by the Trust to own directly or indirectly beneficially more than 5% of the outstanding Shares of the Trust. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE General Shareholders are dependent on the good faith of the respective parties subject to such conflicts to resolve them equitably. Although the Sponsor attempts to monitor these conflicts, it is extremely difficult, if not impossible, for the Sponsor to ensure that these conflicts do not, in fact, result in adverse consequences to the Trust. The Sponsor asserts that Shareholders have, by subscribing for Shares, consented to the conflicts of interest described below in the event of any proceeding alleging that such conflicts violated any duty owed by the Sponsor to investors. The Sponsor The officers, directors and personnel providing services with respect to the Sponsor do not devote their time exclusively to the Trust. These persons are directors, officers or employees of other entities, including affiliates of the Sponsor, which may compete with the Trust for their services. They could have a conflict between their responsibilities to the Trust and to those other entities. The Sponsor has sole current authority to manage the investments and operations of the Trust, and this may allow it to act in a way that furthers its own interests which may create a conflict with your best interests. Shareholders have very limited voting rights, which limit their ability to influence matters such as amendment of the Trust Agreement, change in the Trust’s basic investment policy, dissolution of the Trust, or the sale or distribution of the Trust’s assets. The Seed Investor WisdomTree, Inc., the parent of the Sponsor, purchased: (i) $50,000 in Shares at a price per Share of $50 on December 22, 2023, and (ii) $2,450,000 in Shares at a price per Share of $50 on January 8, 2024, for a total of $2,500,000, resulting in total ownership of 50,000 Shares . Prime Execution Agent The Trust may engage in sales of bitcoin by placing orders with the Prime Execution Agent. The Prime Execution Agent routes orders placed by the Sponsor through the prime execution agent execution platform (the “Trading Platform”) to a Connected Trading Venue where the order is executed. Each order placed by the Sponsor is sent, processed and settled at each Connected Trading Venue to which it is routed. The Prime Execution Agent Agreement provides that the Prime Execution Agent is subject to certain conflicts of interest, including: (i) the Trust’s orders may be routed to the Prime Execution Agent’s own execution venue where the Trust’s orders may be executed against other customers of the Prime Execution Agent or with the Coinbase acting as principal, (ii) the beneficial identity of the counterparty purchaser or seller with respect to the Trust’s orders may be unknown and therefore may inadvertently be another client of the Prime Execution Agent, (iii) the Prime Execution Agent does not engage in front-running, but is aware of the Trust’s orders or imminent orders and may execute a trade for its own inventory (or the account of an affiliate) while in possession of that knowledge and (iv) the Prime Execution Agent may act in a principal capacity with respect to certain orders. As a result of these and other conflicts, when acting as principal, the Prime Execution Agent may have an incentive to favor its own interests and the interests of its affiliates over the Trust’s interests. 93 Proprietary and Individual Trading/Other Clients The Sponsor and its respective directors, officers, employees and/or affiliates (and the affiliates’ directors, officers and employees) may trade in the bitcoin, cryptocurrency, derivative or other markets for their own accounts and for the accounts of their clients, and in doing so may take positions opposite to those held by the Trust or ahead of may compete with the Trust for positions in the marketplace. Such trading may create conflicts of interest on behalf of one or more such persons in respect of their obligations to the Trust. Further, such transactions may not serve to benefit the Shareholders of the Trust and may have a positive or negative effect on the value of the bitcoin held by the Trust and, consequently, on the market value of bitcoin. There can be no assurance that any of the foregoing will not have an adverse effect on the performance of the Trust or its Shares. Records of proprietary trading and trading on behalf of other clients are not available for inspection by Shareholders. Internal written trading policies are also not available for inspection by Shareholders. Because the Sponsor and its respective directors, officers, employees and/or affiliates (and the affiliates’ directors, officers and employees) may trade for their own accounts at the same time that the Sponsor is managing the Trust, prospective investors should be aware that such persons may from time-to-time take positions in their proprietary accounts which are opposite, or ahead of, the positions taken for the Trust and proprietary accounts may receive preferential treatment as it relates to the pool. Resolution of Conflicts Procedures The Trust Agreement provides that whenever a conflict of interest exists between the Sponsor or any of its affiliates, on the one hand, and the Trust or any Shareholders or any other person, on the other hand, the Sponsor will resolve such conflict of interest considering the relative interest of each party (including its own interest) and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any applicable accepted accounting practices or principles. Director Independence As a statutory trust, the Trust does not have a board of directors. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Audit and Non-Audit Fees The table below summarizes the fees for services performed by Ernst and Young LLP for the year ended December 31, 2023. 2023 Audit fees $ 52,000 Audit-related fees — Tax fees — All other fees — Total $ 52,000 Approval of Independent Registered Public Accounting Firm Services and Fees The Sponsor approved the services provided by the Trust’s independent registered public accounting firm described above. Fees of such services are paid for by the Sponsor and the Sponsor pre-approves, including for the year ended December 31, 2023, all audit and allowed non-audit services of the Trust’s independent registered public accounting firm, including all engagement fees and terms. 94 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 1. Financial Statements See Index to Financial Statements on Page F-1 for a list of the financial statements being filed herein. 2. Financial Statement Schedules Schedules have been omitted since they are either not required, not applicable, or the information has otherwise been included. 95 3. Exhibits Incorporated by Reference Exhibit No. Exhibit Description Form File No. Exhibit No. Date Filed Herewith 4.1 Amended and Restated Trust Agreement, dated as of December 28, 2023 S-1/A 333-254134 3.1 12/29/2023 4.2 Second Amended and Restated Trust Agreement, dated as of January 6, 2024 S-1/A 333-254134 3.1 1/8/2024 4.3 Certificate of Trust S-1 333-254134 3.2 3/11/2021 4.4 Amended Certificate of Trust S-1/A 333-254134 3.3 12/18/2023 4.5 Description of Registrant’s Securities X 10.1 Coinbase Prime Execution Agent Agreement (including Trade Financing Agreement) S-1/A 333-254134 10.1 12/29/2023 10.2 Coinbase Custodial Services Agreement (included in Exhibit 10.1) S-1/A 333-254134 10.1 12/29/2023 10.3 Marketing Agent Agreement , dated as of December 29, 2023 S-1/A 333-254134 10.3 12/29/2023 10.4 Custodian Agreement (Cash and Cash Equivalents) , dated as of December 21, 2023 S-1/A 333-254134 10.4 12/29/2023 10.5 Trust Administration Agreement (including Accounting) , dated as of December 21, 2023 S-1/A 333-254134 10.5 12/29/2023 10.6 Transfer Agency Agreement , dated as of December 21, 2023 S-1/A 333-254134 10.6 12/29/2023 10.7 Form of Authorized Participant Agreement S-1/A 333-254134 10.7 12/29/2023 31.1 Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X 31.2 Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X 32.1 Certification by Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. X 32.2 Certification by Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. X 97.1 Compensation Clawback Policy X 101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. X 101.SCH Inline XBRL Taxonomy Extension Schema Document X 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X 104 Cover Page Interactive Data File-The cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. 96 ITEM 16. FORM 10-K SUMMARY None. 97 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, in the capacities* indicated, thereunto duly authorized. Signature Title Date /s/ Jeremy Schwartz Jeremy Schwartz Chief Executive Officer (Principal Executive Officer)* March 29, 2024 /s/ David Castano David Castano Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)* March 29, 2024 * The registrant is a trust and the persons are signing in their capacities as officers of WisdomTree Digital Commodity Services, LLC, the Sponsor of the registrant . 98 WISDOMTREE BITCOIN FUND INDEX TO FINANCIAL STATEMENTS Financial Statements Report of Independent Registered Public Accounting Firm F-2 (PCAOB 42 ) Statement of Assets and Liabilities for the fiscal period December 22, 2023 through December 31, 2023* F-3 Statement of Changes in Net Assets for the fiscal period December 22, 2023 through December 31, 2023* F-4 Statement of Cash Flows for the fiscal period December 22, 2023 through December 31, 2023* F-5 Notes to Financial Statements F-6 *Subsequent to December 31, 2023, on January 11, 2024, the Trust began its investment operations and, therefore, does not have any reportable activity on the Statement of Operations for the fiscal period ended December 31, 2023. F- 1 Report of Independent Registered Public Accounting Firm To the Shareholder and Sponsor of WisdomTree Bitcoin Fund Opinion on the Financial Statement We have audited the accompanying statement of assets and liabilities of WisdomTree Bitcoin Fund (the “Fund”) as of December 31, 2023, the related statements of changes in net assets and cash flows for the period from December 22, 2023 (date of seeding) to 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 Fund as of December 31, 2023, and the changes in its net assets and its cash flows for the period from December 22, 2023 (date of seeding) through December 31, 2023, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’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 Fund 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 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. Our audit 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 audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. We have served as the auditor of one or more WisdomTree investment companies since 2006. New York, New York March 29, 2024 F- 2 WisdomTree Bitcoin Fund Statement of Assets and Liabilities December 31, 2023 ASSETS: Cash $ 50,000 Total Assets 50,000 LIABILITIES: Total Liabilities — NET ASSETS $ 50,000 Net Assets consist of: Capital Stock at $ 50.00 per share $ 50,000 NET ASSETS $ 50,000 Net Asset Value Per Share – unlimited shares authorized $ 0.0001 par value (based on 1,000 shares outstanding) $ 50.00 See Notes to Financial Statements. F- 3 WisdomTree Bitcoin Fund Statement of Changes in Net Assets For the fiscal period December 22, 2023 through December 31, 2023 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ — CAPITAL SHARE TRANSACTIONS: Net proceeds from sale of shares 50,000 NET INCREASE IN NET ASSETS 50,000 NET ASSETS: Beginning of period — End of period $ 50,000 SHARES CREATED AND REDEEMED: Shares outstanding, beginning of period — Shares created 1,000 Shares redeemed — Shares outstanding, end period 1,000 See Notes to Financial Statements. F- 4 WisdomTree Bitcoin Fund Statement of Cash Flows For the fi scal period December 22, 2023 through December 31, 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net Cash provided by (used for) operating activities $ — CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from shares issued 50,000 Net cash provided by (used for) financing activities 50,000 Net increase in cash 50,000 Cash at beginning of period — Cash at end of period $ 50,000 See Notes to Financial Statements. F- 5 Notes to Financial Statements 1. ORGANIZATION WisdomTree Bitcoin Fund (the “ Trust ”) is a Delaware statutory trust organized on March 8, 2021 under Delaware law pursuant to the Delaware Statutory Trust Act and Fund Agreement (the “ Trust Agreement”). The Fund’s investment objective is to gain exposure to the price of bitcoin, less expenses and liabilities of the Trust’s operations. The Trust is an exchange-traded fund that issues common shares of beneficial interest (the “Shares”) that will be listed on the Cboe BZX Exchange, Inc. (the “Exchange”) and will trade under the ticker symbol “BTCW.” WisdomTree Digital Commodity Services, LLC (the “Sponsor”) serves as sponsor of the Trust . The Sponsor arranges for the creation of the Trust and is responsible for the ongoing registration of the Shares for public offering in the United States and the listing of Shares on the Exchange. The Sponsor will develop and administer a marketing plan for the Trust and prepare marketing materials regarding the Shares, in each case in conjunction with Foreside Fund Services, LLC (the “Marketing Agent”). The sponsor will select the service providers, negotiate the applicable agreements and fees and monitors the performance of the Trust . Delaware Trust Company acts as the trustee of the Trust for the purpose of creating a Delaware statutory trust in accordance with the Delaware Statutory Trust Act (“DSTA”). The Trustee is appointed to serve as the trustee of the Trust in the State of Delaware for the sole purpose of satisfying the requirement of Section 3807(a) of the DSTA that the Trust have at least one fund with a principal place of business in the State of Delaware. The Trust had no operations through December 31, 2023 other than matters relating to its organization and registration under the Securities Act of 1933, as amended, and the sale and issuance of 1,000 common shares of beneficial interest on December 22, 2023. Proceeds from the issuance of these shares were held in cash as presented on the Trust’s Statement of Assets and Liabilities. In the ordinary course of operation, the Trust will sell or redeem its Shares, in blocks of 5,000 Shares (a “Basket”) based on the quantity of bitcoin attributable to each Share of the Trust (net of accrued but unpaid expenses and liabilities). For a subscription of Shares, the subscription shall be in the amount of cash needed to purchase the amount of bitcoin represented by the Basket being created, in each case as calculated by State Street Bank and Trust Company (“State Street”) the Trust’s administrator (the “ Trust Administrator” or the “Cash Custodian”). For a redemption of Shares, the Sponsor shall arrange for the bitcoin represented by the Basket to be sold and the cash proceeds distributed. Financial firms that are authorized to purchase or redeem Shares with the Trust (known as “Authorized Participants”) will deliver cash to the Trust’s account with the Cash Custodian in exchange for Shares when they purchase Shares, and will receive cash (from the Cash Custodian), when they redeem Shares with the Trust . Shares initially comprising the same Basket but offered by the Authorized Participants to the public at different times may have different offering prices, which depend on various factors, including the supply and demand for Shares, the value of the Trust’s assets, and market conditions at the time of a transaction. In the normal course of business, the Trust may enter into contracts that contain a variety of representations or that provide indemnification for certain liabilities. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred. However, the Trust has not had prior claims or losses pursuant to these contracts and believes such exposure to be remote. F- 6 Notes to Financial Statements (continued) 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statement. The financial statement has been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Trust is an investment company for GAAP purposes and follows the specialized accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC” or “Codification”) Topic 946, Financial Services—Investment Companies. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. Indemnifications - The Trust Agreement provides that the Sponsor and its shareholders, members, directors, officers, employees, affiliates and subsidiaries (each a “Sponsor Indemnified Party”) will be indemnified by the Trust and held harmless against any loss, liability or expense incurred under the Trust Agreement without fraud, bad faith, or willful misconduct on the part of such Sponsor Indemnified Party arising out of or in connection with the performance of its obligations hereunder or any actions taken in accordance with the provisions of the Trust Agreement. The Trust’s maximum exposure under these arrangements cannot be known; however, the Trust expects any risk of loss to be remote. Use of Estimates - The preparation of financial statements in conformity with GAAP, requires management to make certain 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 and the reported amounts of increases and decreases in the net assets from operations during the reporting period. Actual results could differ from those estimates. Income Taxes - The Trust is classified as a “grantor trust” for United States federal income tax purposes. As a result, the Trust itself will not be subject to United States federal income tax. Instead, the Trust’s income and expenses will “flow through” to the shareholders. Consequently, each sale of bitcoin by the Trust would constitute a taxable event to shareholders. 3. EXPENSES, ORGANIZATION AND OFFERING COSTS Once investment operations commence, the Trust will pay the Sponsor a fee (the “Sponsor Fee”) in accordance with the Trust agreement and as set forth in the Prospectus. The Sponsor fee shall be included in the Trust agreement and/or Prospectus prior to the commencement of trading of Shares on the listing exchange. The Sponsor Fee is calculated on a daily basis (accrued at 1/365 , or 1/366 in a leap year, of the applicable percentage of the net asset value (the “NAV”) on that day) and paid on a monthly basis. The Sponsor Fee will accrue and be payable in U.S. dollars. The Trust’s only ordinary recurring expense is expected to be the Sponsor Fee. In exchange for the Sponsor’s Fee, the Sponsor has agreed to assume the marketing and the following administrative expenses of the Trust : the fees of the Trustee, the Trust Administrator, Trust Accountant, Transfer Agent, and Marketing Agent, the Custodians’ Fee, Exchange listing fees, SEC registration fees, printing and mailing costs, tax reporting fees, audit fees, license fees and ordinary legal fees and expenses. The Sponsor will pay the costs of the Trust’s organization and the initial sale of the Shares. There is no cap on the amount of these Sponsor paid expenses. For a six-month period commencing on the day the Trust is initially listed on the Cboe BZX Exchange, Inc., the Sponsor will waive the entire Sponsor Fee for the first $1.0 billion of the Trust’s assets. F- 7 Notes to Financial Statements (concluded) The Trust may incur certain non-recurring expenses that are not assumed by the Sponsor, including but not limited to, taxes and governmental charges, any applicable brokerage commissions, financing charges or 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, any indemnification of the Cash Custodian, Coinbase Custody Trust Company LLC (“Bitcoin Custodian”), Trust 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 related to the Trust . Because the Trust does not have any income, it will need to sell bitcoin to cover the Sponsor’s Fee and expenses not assumed by the Sponsor, if any. The Trust may also be subject to other liabilities (for example, as a result of litigation) that have also not been assumed by the Sponsor. The only source of funds to cover those liabilities will be sales of bitcoin held by the Trust . Even if there are no expenses other than those assumed by the Sponsor, and there are no other liabilities of the Trust , the Trust will still need to sell bitcoin to pay the Sponsor’s Fee. The result of these sales is a decrease in the amount of bitcoin represented by each Share. To cover the Sponsor’s Fee and expenses not assumed by the Sponsor, the Sponsor or its delegate will cause the Trust (or its delegate) to convert bitcoin into U.S. dollars at the price available through Coinbase, Inc. (“Coinbase Inc.” or the “Prime Broker”, which is an affiliate of the Bitcoin Custodian). The number of bitcoins represented by a Share will decline each time the Trust pays the Sponsor’s Fee or any Trust expenses not assumed by the Sponsor by transferring or selling bitcoins. The Trust is responsible for paying any costs associated with the transfer of bitcoin to the Sponsor or the sale of bitcoin. However, under the terms of each Authorized Participant Agreement, the Authorized Participants will be responsible for any brokerage or transaction costs associated with the sale or transfer of bitcoin incurred in connection with the fulfillment of a creation and redemption order. 4. RELATED PARTIES As of December 31, 2023 , WisdomTree, Inc. owned 1,000 shares or 100 % of the outstanding Shares of the Trust . WisdomTree, Inc. is the parent company of the Sponsor. 5. SUBSEQUENT EVENTS On January 11, 2024, the Trust was declared effective by the U.S. Securities and Exchange Commission (SEC), was listed for secondary market trading on the Cboe BZX Exchange, Inc., and the Trust began investment operations of investing in bitcoin. Effective February 2, 2024, the Sponsor Fee and related fee waiver were reduced from 0.30 % to 0.25 % per annum. F-8