What changed in this filing

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Item 1A. Risk Factors

2026-03-27 compared with 2025-03-27 · 1872 added, 1915 removed, 637 unchanged (86% of the section changed)

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· The value of Shares depends on the development and acceptance of the Bitcoin network.

The Bitcoin network is in the early stages of

development and has a limited history, and there is no assurance that usage of Bitcoin network, and bitcoin itself, will continue to grow.

The slowing or stopping of the development of the Bitcoin network or acceptance of the Bitcoin network may adversely affect an investment

in the Trust.

The Bitcoin network is in the early stages

of development and has a limited history, and there is no assurance that usage of the Bitcoin network, and bitcoin itself, will

continue to grow.

The slowing or stopping of the development of the Bitcoin network or acceptance of the Bitcoin network may

adversely affect an investment in the Trust.

· The trading prices of many digital assets, including bitcoin, have experienced extreme volatility in recent periods and may continue

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Risk Factors Associated with bitcoin and the Bitcoin Network

Digital assets such as bitcoin are relatively new, and

the value of the Shares is subject to a number of factors relating to the capabilities and development of blockchain technologies and

to the fundamental investment characteristics of digital assets that are uncertain and difficult to evaluate.

Digital assets such as bitcoin are relatively new,

and the value of the Shares is influenced by a wide variety of factors that are uncertain and difficult to evaluate, such as the infancy

of their development, their dependence on technologies such as cryptographic protocols, their dependence on the role played by miners

and developers and the potential for malicious activity.

For example, the following are some of the risks that could materially adversely

affect the value of the Shares:

Digital assets such as bitcoin are relatively new, and the value

of the Shares is subject to a number of factors relating to the capabilities and development of blockchain technologies and to the fundamental

investment characteristics of digital assets that are uncertain and difficult to evaluate.

Digital assets such as bitcoin are relatively new, and the value of

the Shares is influenced by a wide variety of factors that are uncertain and difficult to evaluate, such as the infancy of their development,

their dependence on technologies such as cryptographic protocols, their dependence on the role played by miners and developers and the

potential for malicious activity.

For example, the following are some of the risks that could materially adversely affect the value of

· Bitcoin’s lack of a physical form, reliance on technology for its creation, existence and transactional validation and its decentralization

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bitcoin holdings, and the Trust’s financial condition and operating results would be harmed.

· The trading prices of many digital assets, including bitcoin, have experienced extreme volatility in recent periods and may continue

Based on the last ten years, the historical annualized volatility of bitcoin was approximately 81%.

Over the course of 2021,

there were steep increases in the value of certain digital assets, including bitcoin and multiple market observers asserted that digital

assets were experiencing a “bubble.” These increases were followed by steep drawdowns throughout 2022 in digital asset trading

prices, including for bitcoin.

In the 2021-2022 cycle, the price of bitcoin peaked at $67,734 and bottomed at $15,632, marking a steep

77% drawdown.

These episodes of rapid price appreciation followed by steep drawdowns have occurred multiple times throughout bitcoin’s

history, including in 2011, 2013-2014, and 2017-2018, before repeating again in 2021-2022.

Over the course of 2023 and 2024, bitcoin prices

continued to exhibit extreme volatility.

For example, after the results of the U.S.

presidential election in November 2024, the price

of bitcoin rallied to an all-time high of over $100,000 in December 2024 based, in part, on the market’s perception that the new

presidential administration would be pro-digital assets, and then fell below $100,000 before year end.

Extreme volatility may persist,

and the value of the Shares may significantly decline in the future without recovery.

The digital asset markets may still be experiencing

a bubble or may experience a bubble again in the future.

For example, in the first half of 2022, each of Celsius Network, Voyager Digital

Ltd., and Three Arrows Capital declared bankruptcy, resulting in a loss of confidence in participants of the digital asset ecosystem and

negative publicity surrounding digital assets more broadly.

· The trading prices of bitcoin have experienced extreme volatility in recent periods and may continue to do so.

For example, there

were steep increases in the value of bitcoin over the course of 2021, and multiple market observers asserted that bitcoin was experiencing

a “bubble.” These increases were followed by steep drawdowns throughout 2022 in bitcoin trading prices.

These episodes of

rapid price appreciation followed by steep drawdowns have occurred multiple times throughout bitcoin’s history, including in 2011-2012,

2013-2015, and 2017-2018, before repeating again in 2021-2022.

During the 12 months ended December 31, 2025, bitcoin prices continued to exhibit extreme volatility.

Extreme volatility may persist and the value of the Shares

may significantly decline in the future without recovery.

The digital asset markets may still be experiencing a bubble or may experience

a bubble again in the future.

For example, in the first half of 2022, each of Celsius Network, Voyager Digital Ltd., and Three Arrows

Capital declared bankruptcy, resulting in a loss of confidence in participants of the digital asset ecosystem and negative publicity surrounding

digital assets more broadly.

In November 2022, FTX Trading Ltd.

(“FTX”), one of the largest

digital asset platforms by volume at the time, halted customer withdrawals amid rumors of the company’s liquidity issues and likely

insolvency, which were subsequently corroborated by its CEO.

Shortly thereafter, FTX’s CEO resigned and FTX and many of its affiliates

filed for bankruptcy in the United States, while other affiliates have entered insolvency, liquidation, or similar proceedings around

the globe, following which the U.S.

Department of Justice brought criminal fraud and other charges, and the SEC and CFTC brought civil

securities and commodities fraud charges, against certain of FTX’s and its affiliates’ senior executives, including its former

In addition, several other entities in the digital asset industry filed for bankruptcy following FTX’s bankruptcy filing, such

as BlockFi Inc.

and Genesis Global Capital, LLC (“Genesis”).

In response to these events, the digital asset markets have experienced

extreme price volatility and other entities in the digital asset industry have been, and may continue to be, negatively affected, further

undermining confidence in the digital asset markets.

These events have also negatively impacted the liquidity of the digital asset markets

as certain entities affiliated with FTX engaged in significant trading activity.

If the liquidity of the digital asset markets continues

to be negatively impacted by these events, digital asset prices, including bitcoin, may continue to experience significant volatility

or price declines and confidence in the digital asset markets may be further undermined.

While regulatory and enforcement scrutiny increased

through the end of 2024, including from, among others, the Department of Justice, the SEC, the CFTC, the White House and Congress, as

well as state regulators and authorities, the new U.S.

(“FTX”), one of the largest digital asset trading platforms

by volume at the time, halted customer withdrawals amid rumors of the company’s liquidity issues and likely insolvency, which were

subsequently corroborated by its CEO.

Shortly thereafter, FTX’s CEO resigned and FTX and many of its affiliates filed for bankruptcy

in the United States, while other affiliates have entered insolvency, liquidation, or similar proceedings around the globe, following

which the U.S.

Department of Justice brought criminal fraud and other charges, and the SEC and CFTC brought civil securities and commodities

fraud charges, against certain of FTX’s and its affiliates’ senior executives, including its former CEO.

In addition, several

other entities in the digital asset industry filed for bankruptcy following FTX’s bankruptcy filing, such as BlockFi Inc.

Global Capital, LLC (“Genesis”).

In response to these events, the digital asset markets have experienced extreme price volatility

and other entities in the digital asset industry have been, and may continue to be, negatively affected, further undermining confidence

in the digital asset markets.

These events have also negatively impacted the liquidity of the digital asset markets as certain entities

affiliated with FTX engaged in significant trading activity.

If the liquidity of the digital asset markets continues to be negatively

impacted by these or similar events, digital asset prices, including bitcoin, may continue to experience significant volatility or price

declines and confidence in the digital asset markets may be further undermined.

While, regulatory and enforcement scrutiny increased through

the end of 2024, including from, among others, the Department of Justice, the SEC, the CFTC, the White House and Congress, as well as

state regulators and authorities, the current U.S.

presidential administration has signaled its desire to strengthen U.S.

in the digital assets space through the issuance of executive orders and the establishment of an interagency working group that is tasked

leadership in

the digital assets space through the issuance of executive orders and the establishment of an interagency working group that is tasked

with proposing a regulatory framework governing the issuance and operation of digital assets in the United States in early 2025.

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Certain members of Congress have also outlined a proposed bicameral roadmap

for digital assets legislation.

The exact timeline and impact of these recent efforts on our business is uncertain and it is not possible

to predict at this time what risks, if any, that they may pose to the Trust, its service providers or to the digital asset industry as

Extreme volatility in the future, including declines in the trading prices of bitcoin, could have a material adverse effect on

the value of the Shares and the Shares could lose all or substantially all of their value.

The Trust is not actively managed and will

not take any actions to take advantage, or mitigate the impacts, of volatility in the price of bitcoin.

for digital asset legislation to address inconsistencies in digital asset classifications.

In 2023, the D.C.

Circuit Court found that

the SEC’s denial of the Grayscale Bitcoin Trust’s listing was “arbitrary and capricious” under the Administrative

Procedures Act in light of the SEC’s approval of two similar bitcoin futures-based exchange-traded products (“ETPs”).

In the immediate aftermath of this court decision, the price of bitcoin increased from nearly $26,000 to over $28,100 and reached record

highs during 2025 before retreating.

The exact timeline and impact of these recent regulatory developments on the Trust’s business

is uncertain and it is not possible to predict at this time what risks, if any, that regulatory developments may pose to the Trust, its

service providers or to the digital asset industry as a whole.

Extreme volatility in the future, including declines in the

trading prices of bitcoin, could have a material adverse effect on the value of the Shares and the Shares could lose all or substantially

all of their value.

The Trust is not actively managed and will not take any actions to take advantage, or mitigate the impacts, of volatility

in the price of bitcoin.

· The loss or destruction of a private key required to access a digital asset such as bitcoin may be irreversible.

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the Bitcoin network.

Further, given the recentness of the development of digital asset networks, digital assets may not function as intended

and parties may be unwilling to use digital assets, which would dampen the growth, if any, of digital asset networks.

Because bitcoin

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For example, malicious attacks by “miners” who validate

bitcoin transactions, inadequate mining fees to incentivize validating of bitcoin transactions, hard “forks” of the into multiple

bitcoin transactions, inadequate mining fees to incentivize validating of bitcoin transactions, hard “forks” of the Bitcoin blockchain into multiple

blockchains, and advances in quantum computing could undercut the integrity of the Bitcoin blockchain and negatively affect the price

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protocol of the Bitcoin network could damage the network, and adversely affect the value of bitcoin.

· Bitcoin have only recently become selectively accepted as a means of payment by merchants and retail and commercial businesses, and

· Bitcoin has only recently become selectively accepted as a means of payment by merchants and retail and commercial businesses, and

use of bitcoin by consumers to pay such merchants and businesses remains limited.

As a result, the prices of bitcoins may be primarily

As a result, the price of bitcoin may be primarily

determined by speculators and miners, thus contributing to price volatility that makes retailers less likely to accept it as a form of

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delays in the recording of transactions could result in a loss of confidence in the Bitcoin network.

· In the past, flaws in the source code for digital asset networks have been exposed and exploited, including flaws that disabled some

functionality for users, exposed users’ personal information and/or resulted in the theft of users’ digital assets.

The cryptography

underlying Bitcoin could prove to be flawed or ineffective, or developments in mathematics and/or technology, such as advances in quantum

computing, could result in such cryptography becoming ineffective, enabling a malicious actor to take the Trust’s bitcoin, which

would adversely affect the value of the Shares.

Even if another digital asset other than bitcoin were affected by similar circumstances,

any reduction in confidence in the robustness of the source code or cryptography underlying digital assets generally could negatively

affect the demand for all digital assets, including bitcoin, and therefore adversely affect the value of the Shares.

· In the past, flaws in the source code for digital assets have been exposed and exploited, including flaws that disabled some functionality

for users, exposed users’ personal information and/or resulted in the theft of users’ digital assets.

The cryptography underlying

bitcoin could prove to be flawed or ineffective, or developments in mathematics and/or technology, including advances in digital computing,

algebraic geometry and quantum computing, could result in such cryptography becoming ineffective.

Quantum computing technology is an emerging

phenomenon which, because it is still developing, makes it difficult to predict its ultimate effect on the future value of bitcoin and

other digital assets.

However, if quantum computing technology is able to advance and significantly increase its capacity relative to

the capacity of today’s leading quantum computers, it could potentially undermine the viability of many of the cryptographic algorithms

used across the world’s information technology infrastructure, including the cryptographic algorithms used for digital assets like

If quantum computing is able to advance in that way, there is a risk that quantum computing could result in the cryptography

underlying the Bitcoin network becoming ineffective, which, if realized, could compromise the security of the Bitcoin network, or allow

a malicious actor to compromise the wallets holding bitcoin owned by the Trust or others on the Bitcoin network, which would result in

losses to Shareholders.

While various actors in the Bitcoin community are taking steps to enable the uses of cryptographic algorithms

that would be resistant to advanced quantum computers, there is no guarantee that new quantum-proof architectures will be built and appropriate

transitions will be implemented across the network at scale in a timely manner;

any such changes could require the achievement of broad

consensus within the Bitcoin network community and a fork (or multiple forks), and there can be no assurance that such consensus would

be achieved or the changes implemented successfully.

If any of the foregoing were to occur, it could result in losses to Shareholders.

In any of these circumstances, a malicious actor may be able to compromise the security of the Bitcoin network or take the Trust’s

bitcoin, which would adversely affect the value of the Shares.

Moreover, functionality of the Bitcoin network may be negatively affected

such that it is no longer attractive to users, thereby dampening demand for bitcoin.

Even if another digital asset other than bitcoin

were affected by similar circumstances, any reduction in confidence in the source code or cryptography underlying digital assets generally

could negatively affect the demand for digital assets and therefore adversely affect the value of the Shares.

· Banks and other established financial institutions may refuse to process funds for bitcoin transactions;

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liquidation of bitcoin and withdrawal of assets from the Bitcoin Custodian even if the Sponsor determined that such liquidation were appropriate

Additionally, because digital assets, including bitcoin,

have been in existence for a short period of time and are continuing to develop, there may be additional risks in the future that are

impossible to predict or evaluate as of the date of this registration statement.

The value of the Shares relates directly to the value of

bitcoin, the value of which may be highly volatile and subject to fluctuations due to a number of factors.

The value of the Shares relates directly to the value

of the bitcoin held by the Trust.

The price of bitcoin has fluctuated widely and may continue to experience significant price fluctuations,

which could adversely affect the value of the Shares.

The price of bitcoin could drop precipitously (including

Additionally, because digital assets, including bitcoin, have been

in existence for a short period of time and are continuing to develop, there may be additional risks in the future that are impossible

to predict or evaluate as of the date of this registration statement.

The value of the Shares relates directly to the value of bitcoin,

the value of which may be highly volatile and subject to fluctuations due to a number of factors.

The value of the Shares relates directly to the value of the bitcoin

held by the Trust.

The price of bitcoin has fluctuated widely and may continue to experience significant price fluctuations, which could

adversely affect the value of the Shares.

The price of bitcoin could drop precipitously (including to zero).

Several factors may affect the price of bitcoin, including:

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example, while the recent activities under the current U.S.

presidential administration and the SEC have indicated a desire to provide

regulatory clarity on the application of securities laws and other regulations to such assets, the final outcome of any such efforts is

unknown , and it is possible that regulators in the United States or foreign countries may create new regulations or interpret laws in

a manner that adversely affects the price of bitcoin.

The growth of the digital assets industry in general, and the use and acceptance

of bitcoin in particular, may also impact the price of bitcoin and is subject to a high degree of uncertainty.

presidential administration and the SEC have indicated a desire to strengthen

leadership in the digital assets space through the issuance of executive orders and the establishment of an interagency working group

that is tasked with proposing a regulatory framework governing the issuance and operation of digital assets in the United States.

possible that regulators in the United States or foreign countries may create new regulations or interpret laws in a manner that adversely

affects the price of bitcoin.

The growth of the digital assets industry in general, and the use and acceptance of bitcoin in particular,

may also impact the price of bitcoin and is subject to a high degree of uncertainty.

· Global bitcoin existence was approximately 19,970,000, as of December 31, 2025, although not all of such bitcoin were in circulation

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by the digital asset platform FTX Trading that it would freeze withdrawals and transfers from its accounts and subsequent filing for bankruptcy

protection and the recent SEC enforcement action brought against Binance Holdings Ltd., which initially sought to freeze all of its assets

during the pendency of the enforcement action;

· The filing for bankruptcy protection by, liquidation of, or market concerns about the financial viability of digital asset custodians,

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· Decreased confidence in bitcoin or digital asset platforms generally due to the failure of certain bitcoin or digital asset platforms

or their being subject to hacks, such as the February 2025 hack of the crypto exchange Bybit that resulted in the theft of over $1.5 billion

of ETH, service outages, regulatory action, or manipulative trading activity, as well as to the increase or lack of regulation and transparency

associated with some of them;

or their being subject to hacks, such as the February 2025 hack of the crypto exchange Bybit Fintech Limited (“Bybit”) that

resulted in the theft of over $1.5 billion of ETH, service outages, regulatory action, or manipulative trading activity, as well as to

the increase or lack of regulation and transparency associated with some of them;

· Fiat currency withdrawal and deposit policies on bitcoin platforms;

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· The availability and cost of funding and capital.

The Trust is not actively managed and does not and

will not have any strategy relating to the development of the Bitcoin network.

Furthermore, the Sponsor cannot be certain as to the impact

of the expansion of its bitcoin holdings on the digital asset industry and the Bitcoin network.

A decline in the popularity or acceptance

of the Bitcoin network would harm the value of the Trust.

Due to the nature of private keys, bitcoin transactions

are irrevocable and stolen or incorrectly transferred bitcoin may be irretrievable.

As a result, any incorrectly executed bitcoin transactions

could adversely affect an investment in the Trust.

The Trust is not actively managed and does not and will not have any

strategy relating to the development of the Bitcoin network.

Furthermore, the Sponsor cannot be certain as to the impact of the expansion

of its bitcoin holdings on the digital asset industry and the Bitcoin network.

A decline in the popularity or acceptance of the Bitcoin

network would harm the value of the Trust.

Due to the nature of private keys, bitcoin transactions are irrevocable

and stolen or incorrectly transferred bitcoin may be irretrievable.

As a result, any incorrectly executed bitcoin transactions could adversely

affect an investment in the Trust.

Bitcoin transactions are not reversible.

Once a transaction

has been signed with private keys, verified and recorded in a block that is added to the Bitcoin blockchain, an incorrect transfer of

cryptocurrency, such as bitcoin, or a theft of bitcoin generally will not be reversible, and the Trust may not be capable of seeking compensation

for any such transfer or theft.

To the extent that the Trust is unable to successfully seek redress for such error or theft, such loss

could adversely affect an investment in the Trust.

The custody of the Trust’s bitcoin is handled

by the Bitcoin Custodian.

The Sponsor has evaluated the procedures and internal controls of the Trust’s Custodian to safeguard the

Trust’s bitcoin holdings.

However, it is possible that, through computer or human error, or through theft or criminal action, the

Trust’s bitcoin could be transferred from the Trust’s account at the Bitcoin Custodian in incorrect amounts or to unauthorized

third parties, or to uncontrolled accounts.

Alternatively, if the Bitcoin Custodian’s internal procedures and controls are inadequate

to safeguard the Trust’s bitcoin holdings, and the Trust’s private key(s) is (are) lost, destroyed or otherwise damaged or

compromised and no backup of the private key(s) is (are) accessible, the Trust will be unable to access its bitcoin, which could adversely

affect an investment in the Shares of the Trust.

When used to sign transactions, the risk of private key theft is heightened as security

measures like encryption need to be reversed in order to access and use the private key.

In addition, if the Trust’s private key(s)

is (are) misappropriated and the Trust’s bitcoin holdings are stolen, including from or by the Bitcoin Custodian, the Trust could

lose some or all of its bitcoin holdings, which could adversely impact an investment in the Shares of the Trust.

Such events have occurred

in connection with digital assets in the past and should not be unexpected in the future.

For example, in September 2014, the Chinese

digital asset platform Huobi announced that it sent bitcoin to the wrong customers.

Security threats to the Trust’s account with the

Bitcoin Custodian or Prime Execution Agent could result in the halting of Trust operations and a loss of Trust assets or damage to the

reputation of the Trust, each of which could result in a reduction in the price of the Shares.

Security breaches, computer malware and computer

hacking attacks have been a prevalent concern in relation to digital assets.

The Sponsor believes that the Trust’s bitcoin held

in the Trust’s account with the Bitcoin Custodian or Trading Balance held with the Prime Execution Agent will be an appealing target

to hackers or malware distributors seeking to destroy, damage or steal the Trust’s bitcoin and will only become more appealing as

the Trust’s assets grow.

To the extent that the Trust, the Sponsor, the Bitcoin Custodian or Prime Execution Agent is unable to

identify and mitigate or stop new security threats or otherwise adapt to technological changes in the digital asset industry, the Trust’s

bitcoin may be subject to theft, loss, destruction or other attack.

The Sponsor has evaluated the security procedures

in place for safeguarding the Trust’s bitcoin.

Nevertheless, the security procedures cannot guarantee the prevention of any loss

due to a security breach, hack, software defect or act of God that may be borne by the Trust and the security procedures may not protect

against all errors, software flaws or other vulnerabilities in the Trust’s technical infrastructure, which could result in theft,

loss or damage of its assets.

The Sponsor does not control the Bitcoin Custodian’s

or Prime Execution Agent’s operations or their implementation of such security procedures and there can be no assurance that such

security procedures will actually work as designed or prove to be successful in safeguarding the Trust’s assets against all possible

sources of theft, loss or damage.

Assets not held in cold storage, such as assets held in the Trading Balance, may be more vulnerable

to security breach, hacking or loss than assets held in cold storage.

Furthermore, assets held in a trading account, including the Trading

Balance, generally is held in hot storage on an omnibus, rather than segregated basis, which creates greater risk of loss.

bitcoin is only moved into the Trading Balance in connection with and to the extent of purchases and sales of bitcoin by the Trust, there

are no policies that would limit the amount of bitcoin that can be held temporarily in the Trading Balance maintained by the Prime Execution

Once a transaction has been

signed with private keys, verified and recorded in a block that is added to the Bitcoin blockchain, an incorrect transfer of cryptocurrency,

such as bitcoin, or a theft of bitcoin generally will not be reversible, and the Trust may not be capable of seeking compensation for

any such transfer or theft.

To the extent that the Trust is unable to successfully seek redress for such error or theft, such loss could

adversely affect an investment in the Trust.

The custody of the Trust’s bitcoin is handled by the Bitcoin

The Sponsor has evaluated the procedures and internal controls of the Trust’s Custodian to safeguard the Trust’s

bitcoin holdings.

However, it is possible that, through computer or human error, or through theft or criminal action, the Trust’s

bitcoin could be transferred from the Trust’s account at the Bitcoin Custodian in incorrect amounts or to unauthorized third parties,

or to uncontrolled accounts.

Alternatively, if the Bitcoin Custodian’s internal procedures and controls are inadequate to safeguard

the Trust’s bitcoin holdings, and the Trust’s private key(s) is (are) lost, destroyed or otherwise damaged or compromised

and no backup of the private key(s) is (are) accessible, the Trust will be unable to access its bitcoin, which could adversely affect

an investment in the Shares of the Trust.

When used to sign transactions, the risk of private key theft is heightened as security measures

like encryption need to be reversed in order to access and use the private key.

In addition, if the Trust’s private key(s) is (are)

misappropriated and the Trust’s bitcoin holdings are stolen, including from or by the Bitcoin Custodian, the Trust could lose some

or all of its bitcoin holdings, which could adversely impact an investment in the Shares of the Trust.

Such events have occurred in connection

with digital assets in the past and should not be unexpected in the future.

For example, in September 2014, the Chinese digital asset

platform Huobi announced that it sent bitcoin to the wrong customers.

Security threats to the Trust’s account with the Bitcoin

Custodian or Prime Execution Agent could result in the halting of Trust operations and a loss of Trust assets or damage to the reputation

of the Trust, each of which could result in a reduction in the price of the Shares.

Security breaches, computer malware and computer hacking attacks have

been a prevalent concern in relation to digital assets.

The Sponsor believes that the Trust’s bitcoin held in the Trust’s

account with the Bitcoin Custodian or Trading Balance held with the Prime Execution Agent will be an appealing target to hackers or malware

distributors seeking to destroy, damage or steal the Trust’s bitcoin and will only become more appealing as the Trust’s assets

To the extent that the Trust, the Sponsor, the Bitcoin Custodian or Prime Execution Agent is unable to identify and mitigate or

stop new security threats or otherwise adapt to technological changes in the digital asset industry, the Trust’s bitcoin may be

subject to theft, loss, destruction or other attack.

The Sponsor has evaluated the security procedures in place for safeguarding

the Trust’s bitcoin.

Nevertheless, the security procedures cannot guarantee the prevention of any loss due to a security breach,

hack, software defect or act of God that may be borne by the Trust and the security procedures may not protect against all errors, software

flaws or other vulnerabilities in the Trust’s technical infrastructure, which could result in theft, loss or damage of its assets.

The Sponsor does not control the Bitcoin Custodian’s or Prime

Execution Agent’s operations or their implementation of such security procedures and there can be no assurance that such security

procedures will actually work as designed or prove to be successful in safeguarding the Trust’s assets against all possible sources

of theft, loss or damage.

Assets not held in cold storage, such as assets held in the Trading Balance, may be more vulnerable to security

breach, hacking or loss than assets held in cold storage.

Furthermore, assets held in a trading account, including the Trading Balance,

generally is held in hot storage on an omnibus, rather than segregated basis, which creates greater risk of loss.

Even though bitcoin

is only moved into the Trading Balance in connection with and to the extent of purchases and sales of bitcoin by the Trust, there are

no policies that would limit the amount of bitcoin that can be held temporarily in the Trading Balance maintained by the Prime Execution

This could create greater risk of loss of the Trust’s bitcoin, which could cause Shareholders to suffer losses.

The security procedures and operational infrastructure

may be breached due to the actions of outside parties, error or malfeasance of Sponsor personnel, the Bitcoin Custodian, Prime Execution

Agent, or otherwise, and, as a result, an unauthorized party may obtain access to the Trust’s account with the Bitcoin Custodian,

the private keys (and therefore bitcoin) or other data of the Trust.

Additionally, outside parties may attempt to fraudulently induce

Sponsor personnel, the Bitcoin Custodian, Prime Execution Agent, or the Trust’s other service providers to disclose sensitive information

in order to gain access to the Trust’s infrastructure.

As the techniques used to obtain unauthorized access, disable or degrade

service, or sabotage systems change frequently, or may be designed to remain dormant until a predetermined event and often are not recognized

until launched against a target, the Sponsor, the Bitcoin Custodian and/or other Trust service providers may be unable to anticipate these

techniques or implement adequate preventative measures.

An actual or perceived breach of the Trust’s

account with the Bitcoin Custodian, Prime Execution Agent and/or other Trust service providers could harm the Trust’s operations,

result in partial or total loss of the Trust’s assets, damage the Trust’s reputation and negatively affect the market perception

of the effectiveness of the Trust, all of which could in turn reduce demand for the Shares, resulting in a reduction in the price of the

The Trust may also cease operations, suspend redemptions or suffer a reduction in assets, the occurrence of which could similarly

result in a reduction in the price of the Shares.

The value of the Shares depends on the development and

acceptance of the Bitcoin network.

The slowing or stopping of the development or acceptance of the Bitcoin network may adversely affect

an investment in the Trust.

The Bitcoin network, including the cryptographic

and algorithmic protocols associated with the operation of the Bitcoin blockchain, has only been in existence since 2009, and bitcoin

markets have a limited performance record, making them part of a new and rapidly evolving industry that is subject to a variety of factors

that are difficult to evaluate.

The growth of the digital asset industry in general, and the Bitcoin network in particular, is subject

to a high degree of uncertainty.

For example, the following are some of the risks that could materially adversely affect the value of

• As the Bitcoin network continues

to develop and grow, certain technical issues might be uncovered, and the troubleshooting and resolution of such issues requires the attention

and efforts of Bitcoin’s global development community.

• In August 2017, the Bitcoin

network underwent a hard fork that resulted in the creation of a new digital asset network called Bitcoin Cash.

This hard fork was contentious,

and as a result some users of the Bitcoin Cash network may harbor ill will toward the Bitcoin network.

These users may attempt to negatively

impact the use or adoption of the Bitcoin network.

• Also in August 2017, the Bitcoin

Network was upgraded with a technical feature known as “Segregated Witness” with the promise of increasing the number of transactions

per second that can be handled on-chain and enabling so-called second layer solutions, such as the Lightning Network or payment channels

which continue to be developed, that increase transaction throughput by processing certain transactions outside the main Bitcoin blockchain.

These upgrades may fail to achieve the expected benefits or widespread adoption, leading to a decline in public support for, and the price

• It is possible that some of

the largest bitcoin wallets are controlled by the same person or entity, or that other persons or entities control multiple wallets that

collectively hold a significant number of bitcoin, even if each wallet individually only holds a small amount.

As a result of this potential

concentration of ownership, large sales by such holders may have an adverse effect on the market price of bitcoin.

There is no assurance that the Bitcoin network, or

the service providers necessary to accommodate it, will continue in existence or grow.

Furthermore, there is no assurance that the availability

of and access to digital asset service providers will not be negatively affected by government regulation or supply and demand of bitcoin.

A disruption of the Internet may affect the operation of

the Bitcoin network, which may adversely affect the bitcoin industry and an investment in the Trust.

The security procedures and operational infrastructure may be breached

due to the actions of outside parties, error or malfeasance of Sponsor personnel, the Bitcoin Custodian, Prime Execution Agent, or otherwise,

and, as a result, an unauthorized party may obtain access to the Trust’s account with the Bitcoin Custodian, the private keys (and

therefore bitcoin) or other data of the Trust.

Additionally, outside parties may attempt to fraudulently induce Sponsor personnel, the

Bitcoin Custodian, Prime Execution Agent, or the Trust’s other service providers to disclose sensitive information in order to gain

access to the Trust’s infrastructure.

As the techniques used to obtain unauthorized access, disable or degrade service, or sabotage

systems change frequently, or may be designed to remain dormant until a predetermined event and often are not recognized until launched

against a target, the Sponsor, the Bitcoin Custodian and/or other Trust service providers may be unable to anticipate these techniques

or implement adequate preventative measures.

An actual or perceived breach of the Trust’s account with the

Bitcoin Custodian, Prime Execution Agent and/or other Trust service providers could harm the Trust’s operations, result in partial

or total loss of the Trust’s assets, damage the Trust’s reputation and negatively affect the market perception of the effectiveness

of the Trust, all of which could in turn reduce demand for the Shares, resulting in a reduction in the price of the Shares.

may also cease operations, suspend redemptions or suffer a reduction in assets, the occurrence of which could similarly result in a reduction

in the price of the Shares.

The value of the Shares depends on the development and acceptance

of the Bitcoin network.

The slowing or stopping of the development or acceptance of the Bitcoin network may adversely affect an investment

in the Trust.

The Bitcoin network, including the cryptographic and algorithmic protocols

associated with the operation of the Bitcoin blockchain, has only been in existence since 2009, and bitcoin markets have a limited performance

record, making them part of a new and rapidly evolving industry that is subject to a variety of factors that are difficult to evaluate.

The growth of the digital asset industry in general, and the Bitcoin network in particular, is subject to a high degree of uncertainty.

For example, the following are some of the risks that could materially adversely affect the value of the Shares:

· As the Bitcoin network continues to develop and grow, certain technical issues might be uncovered, and the troubleshooting and resolution

of such issues requires the attention and efforts of Bitcoin’s global development community.

· In August 2017, the Bitcoin network underwent a hard fork that resulted in the creation of a new digital asset network called Bitcoin

This hard fork was contentious, and as a result some users of the Bitcoin Cash network may harbor ill will toward the Bitcoin network.

These users may attempt to negatively impact the use or adoption of the Bitcoin network.

· Also in August 2017, the Bitcoin Network was upgraded with a technical feature known as “Segregated Witness” with the

promise of increasing the number of transactions per second that can be handled on-chain and enabling so-called second layer solutions,

such as the Lightning Network or payment channels which continue to be developed, that increase transaction throughput by processing certain

transactions outside the main Bitcoin blockchain.

These upgrades may fail to achieve the expected benefits or widespread adoption, leading

to a decline in public support for, and the price of, bitcoin.

· It is possible that some of the largest bitcoin wallets are controlled by the same person or entity, or that other persons or entities

control multiple wallets that collectively hold a significant number of bitcoin, even if each wallet individually only holds a small amount.

As a result of this potential concentration of ownership, large sales by such holders may have an adverse effect on the market price of

There is no assurance that the Bitcoin network, or the service providers

necessary to accommodate it, will continue in existence or grow.

Furthermore, there is no assurance that the availability of and access

to digital asset service providers will not be negatively affected by government regulation or supply and demand of bitcoin.

A disruption of the Internet may affect the operation of the

Bitcoin network, which may adversely affect the bitcoin industry and an investment in the Trust.

The Bitcoin network relies on the internet.

A significant

disruption of internet connectivity ( i.e.

, one that affects large numbers of users or geographic regions) could disrupt the Bitcoin

network’s functionality and operations until the disruption is resolved.

A disruption of the internet could adversely affect an

investment in the Trust or the ability of the Trust to operate.

A significant disruption

of internet connectivity ( i.e.

, one that affects large numbers of users or geographic regions) could disrupt the Bitcoin network’s

functionality and operations until the disruption is resolved.

A disruption of the internet could adversely affect an investment in the

Trust or the ability of the Trust to operate.

Potential amendments to the Bitcoin network’s protocols

and software could, if accepted and authorized by the Bitcoin network community, adversely affect an investment in the Trust.

The Bitcoin network uses a cryptographic protocol

to govern the interactions within the Bitcoin network.

A loose community known as the core developers has evolved to informally manage

the source code for the protocol.

Membership in the community of core developers evolve over time, largely based on self-determined participation

in the resource section dedicated to bitcoin on Github.com.

The core developers can propose amendments to the Bitcoin network’s

source code that, if accepted by miners and users, could alter the protocols and software of the Bitcoin network and the properties of

These alterations would occur through software upgrades and could potentially include changes to the irreversibility of transactions

and limitations on the mining of new bitcoin, which could undermine the appeal and market value of bitcoin.

Alternatively, software upgrades

and other changes to the protocols of the Bitcoin network could fail to work as intended or could introduce bugs, security risks, or otherwise

adversely affect, the speed, security, usability, or value of the Bitcoin network or bitcoins.

As a result, the Bitcoin network could

be subject to new protocols and software in the future that may adversely affect an investment in the Trust.

The open-source structure of the Bitcoin network protocol

means that the core developers and other contributors are generally not directly compensated for their contributions in maintaining and

developing the Bitcoin network protocol.

A failure to properly monitor and upgrade the Bitcoin network protocol could damage the Bitcoin

network and an investment in the Trust.

The Bitcoin network operates based on an open-source

protocol maintained by the core developers and other contributors, largely on the GitHub resource section dedicated to bitcoin development.

As the Bitcoin network protocol is not sold or made available subject to licensing or subscription fees and its use does not generate

revenues for its development team, the core developers are generally not compensated for maintaining and updating the source code for

The Bitcoin network uses a cryptographic protocol to govern the interactions

within the Bitcoin network.

A loose community known as the core developers has evolved to informally manage the source code for the protocol.

Membership in the community of core developers evolve over time, largely based on self-determined participation in the resource section

dedicated to bitcoin on Github.com.

The core developers can propose amendments to the Bitcoin network’s source code that, if accepted

by miners and users, could alter the protocols and software of the Bitcoin network and the properties of bitcoin.

These alterations would

occur through software upgrades and could potentially include changes to the irreversibility of transactions and limitations on the mining

of new bitcoin, which could undermine the appeal and market value of bitcoin.

Alternatively, software upgrades and other changes to the

protocols of the Bitcoin network could fail to work as intended or could introduce bugs, security risks, or otherwise adversely affect,

the speed, security, usability, or value of the Bitcoin network or bitcoins.

As a result, the Bitcoin network could be subject to new

protocols and software in the future that may adversely affect an investment in the Trust.

The open-source structure of the Bitcoin network protocol means

that the core developers and other contributors are generally not directly compensated for their contributions in maintaining and developing

the Bitcoin network protocol.

Consequently, there is a lack of financial incentive for developers to maintain or develop the Bitcoin network

and the core developers may lack the resources to adequately address emerging issues with the Bitcoin network protocol.

Although the Bitcoin

network is currently supported by the core developers, there can be no guarantee that such support will continue or be sufficient in the

For example, there have been recent reports that the number of core developers who have the authority to make amendments to the

Bitcoin network’s source code in the GitHub repository is relatively small, although there are believed to be a larger number of

developers who contribute to the overall development of the source code of the Bitcoin network.

Further, a bad actor could also attempt

to interfere with the operation of the Bitcoin network by attempting to, or actually, influencing a core developer in a negative way or

with malintent.

Alternatively, some developers may be funded by entities whose interests are at odds with other participants in the Bitcoin

To the extent that material issues arise with the Bitcoin network protocol and the core developers and open-source contributors

are unable to address the issues adequately or in a timely manner, the Bitcoin network and an investment in the Trust may be adversely

A temporary or permanent “fork” of the Bitcoin

Blockchain could adversely affect an investment in the Trust.

A failure to properly monitor and upgrade the Bitcoin network protocol could damage the Bitcoin network

and an investment in the Trust.

The Bitcoin network operates based on an open-source protocol maintained

by the core developers and other contributors, largely on the GitHub resource section dedicated to bitcoin development.

As the Bitcoin

network protocol is not sold or made available subject to licensing or subscription fees and its use does not generate revenues for its

development team, the core developers are generally not compensated for maintaining and updating the source code for the Bitcoin network

Consequently, there is a lack of financial incentive for developers to maintain or develop the Bitcoin network and the core

developers may lack the resources to adequately address emerging issues with the Bitcoin network protocol.

Although the Bitcoin network

is currently supported by the core developers, there can be no guarantee that such support will continue or be sufficient in the future.

For example, there have been recent reports that the number of core developers who have the authority to make amendments to the Bitcoin

network’s source code in the GitHub repository is relatively small, although there are believed to be a larger number of developers

who contribute to the overall development of the source code of the Bitcoin network.

Further, a bad actor could also attempt to interfere

with the operation of the Bitcoin network by attempting to, or actually, influencing a core developer in a negative way or with malintent.

Alternatively, some developers may be funded by entities whose interests are at odds with other participants in the Bitcoin network.

the extent that material issues arise with the Bitcoin network protocol and the core developers and open-source contributors are unable

to address the issues adequately or in a timely manner, the Bitcoin network and an investment in the Trust may be adversely affected.

A temporary or permanent “fork” of the Bitcoin Blockchain

could adversely affect an investment in the Trust.

Bitcoin software is open source.

Any user can download

the software, modify it and then propose that the core developers, users and miners adopt the modification.

When a modification is introduced

and a substantial majority of users and miners consent to the modification, the change is implemented and the Bitcoin network remains

uninterrupted.

However, if less than a substantial majority of users and miners consent to the proposed modification, and the modification

is nonetheless implemented by some users and miners and the modification is not compatible with the software prior to its modification,

the consequence would be what is known as a “fork” ( i.e.

, “split”) of the Bitcoin network (and the blockchain),

with one version running the pre-modified software and the other running the modified software.

The effect of such a fork would be the

existence of two (or more) versions of the Bitcoin network running in parallel, but with each version’s bitcoin lacking interchangeability.

Any user can download the software,

modify it and then propose that the core developers, users and miners adopt the modification.

When a modification is introduced and a

substantial majority of users and miners consent to the modification, the change is implemented and the Bitcoin network remains uninterrupted.

However, if less than a substantial majority of users and miners consent to the proposed modification, and the modification is nonetheless

implemented by some users and miners and the modification is not compatible with the software prior to its modification, the consequence

would be what is known as a “fork” ( i.e.

, “split”) of the Bitcoin network (and the blockchain), with one

version running the pre-modified software and the other running the modified software.

The effect of such a fork would be the existence

of two (or more) versions of the Bitcoin network running in parallel, but with each version’s bitcoin lacking interchangeability.

Such a fork in the Bitcoin blockchain typically would be addressed by community-led efforts to merge the forked Bitcoin blockchains, and

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the effects of a fork.

Additionally, a fork could be introduced by an unintentional,

unanticipated software flaw in the multiple versions of otherwise compatible software users run.

It is also possible that, in a future

accidental or unintentional fork, a substantial number of users and miners could adopt an incompatible version of the digital asset while

resisting community-led efforts to merge the two blockchains, which could cause bitcoin to decline in value.

Further, a hard fork could

lead to new security concerns.

Additionally, a fork could be introduced by an unintentional, unanticipated

software flaw in the multiple versions of otherwise compatible software users run.

It is also possible that, in a future accidental or

unintentional fork, a substantial number of users and miners could adopt an incompatible version of the digital asset while resisting

community-led efforts to merge the two blockchains, which could cause bitcoin to decline in value.

Further, a hard fork could lead to

new security concerns.

Forks have occurred already to the Bitcoin network.

For example, in August 2017, Bitcoin “forked” into Bitcoin and a new digital asset, Bitcoin Cash, as a result of a several-year

dispute over how to increase the rate of transactions that the Bitcoin network can process.

At the time of the fork, bitcoin was valued

at approximately $2,700.

Within approximately two weeks following the fork, bitcoin reached a value of approximately $4,000, while nearly

four months later in mid-December 2017, bitcoin reached an all-time high at the time of approximately $19,500, before dropping to approximately

$14,000 prior to year-end 2017.

Forks may also occur as a network community’s response to a significant security breach.

in July 2016, Ethereum “forked” into Ethereum and a new digital asset, Ethereum Classic, as a result of the Ethereum network

community’s response to a significant security breach in which an anonymous hacker exploited a smart contract running on the Ethereum

network to syphon approximately $60 million of ETH held by the DAO, a distributed autonomous organization, into a segregated account.

In response to the hack, most participants in the Ethereum community elected to adopt a “fork” that effectively reversed the

However, a minority of users continued to develop the original blockchain, now referred to as “Ethereum Classic” with

the digital asset on that blockchain now referred to as Ethereum Classic, or ETC.

ETC now trades on several digital asset platforms.

fork may also occur as a result of an unintentional or unanticipated software flaw in the various versions of otherwise compatible software

that users run.

For example, in

August 2017, Bitcoin “forked” into Bitcoin and a new digital asset, Bitcoin Cash, as a result of a several-year dispute over

how to increase the rate of transactions that the Bitcoin network can process.

There have been other contentious disputes over changes

to the Bitcoin network’s source code, though these have not led to hard forks.

For example, the predominant software implementation

used to access the Bitcoin network is Bitcoin Core.

The October 2025 release of the updated Bitcoin Core client (version 30) removed a

long-standing limit on the inclusion of non-transaction-related data in blocks, the effect of which is to permit larger amounts of arbitrary

data to be embedded in transactions.

This change has prompted debate within the bitcoin community.

Because the change is backwards-compatible,

rather than a hard fork, certain previous versions of the Bitcoin Core client remain operable, and it remains interoperable with other

clients, such as Bitcoin Knots.

Some participants have expressed concerns that such changes could facilitate the inclusion of illegal

or non-transaction-related content on the Bitcoin blockchain or could introduce new or unknown software vulnerabilities.

certain miners and users have reportedly adopted alternative client software implementations to access the Bitcoin network, such as Bitcoin

There is a risk that unresolved divisions could lead to community fragmentation which, if they grew sufficiently severe and were

not resolved, eventually a future Bitcoin network hard fork could occur, which may adversely affect the security or stability of the Bitcoin

network (such as if miners leave the original Bitcoin network for the forked network), reduce or impede the adoption of bitcoin overall,

or cause bitcoin or the Shares to lose value.

Forks may also occur as a network community’s response to a significant

security breach.

For example, in July 2016, Ethereum “forked” into Ethereum and a new digital asset, Ethereum Classic, as

a result of the Ethereum network community’s response to a significant security breach in which an anonymous hacker exploited a

smart contract running on the Ethereum network to syphon approximately $60 million of ETH held by The DAO, a distributed autonomous organization,

into a segregated account.

In response to the hack, most participants in the Ethereum community elected to adopt a “fork”

that effectively reversed the hack.

However, a minority of users continued to develop the original blockchain, now referred to as “Ethereum

Classic” with the digital asset on that blockchain now referred to as Ethereum Classic, or ETC.

ETC now trades on several digital

asset platforms.

A fork may also occur as a result of an unintentional or unanticipated software flaw in the various versions of otherwise

compatible software that users run.

Such a fork could lead to users and miners abandoning the digital asset with the flawed software.

It is possible, however,

that a substantial number of users and miners could adopt an incompatible version of the digital asset while resisting community-led efforts

to merge the two chains.

This could result in a permanent fork, as in the case of Ethereum and Ethereum Classic.

In addition, many developers

have previously initiated hard forks in the Blockchain to launch new digital assets, such as Bitcoin Gold and Bitcoin Diamond.

extent such digital assets compete with bitcoin, such competition could impact demand for bitcoin and could adversely impact the value

of the Shares.

Furthermore, a hard fork can lead to new security

For example, when the Ethereum and Ethereum Classic networks, two other digital asset networks, split in July 2016, replay attacks,

in which transactions from one network were rebroadcast to nefarious effect on the other network, plagued Ethereum exchanges through at

least October 2016.

An Ethereum exchange announced in July 2016 that it had lost 40,000 Ethereum Classic, worth about $100,000 at that

time, as a result of replay attacks.

Similar replay attack concerns occurred in connection with the Bitcoin Cash and Bitcoin Satoshi’s

Vision networks split in November 2018.

Another possible result of a hard fork is an inherent decrease in the level of security due to

significant amounts of mining power remaining on one network or migrating instead to the new forked network.

After a hard fork, it may

become easier for an individual miner or mining pool’s hashing power to exceed 50% of the processing power of a digital asset network

that retained or attracted less mining power, thereby making digital asset networks that rely on proof-of-work more susceptible to attack.

A hard fork may adversely affect the price of bitcoin at the time of announcement or adoption.

For example, the announcement of a hard

fork could lead to increased demand for the pre-fork digital asset, in anticipation that ownership of the pre-fork digital asset would

entitle holders to a new digital asset following the fork.

The increased demand for the pre-fork digital asset may cause the price of

the digital asset to rise.

After the hard fork, it is possible the aggregate price of the two versions of the digital asset running in

parallel would be less than the price of the digital asset immediately prior to the fork.

Furthermore, while the Sponsor will, as permitted

by the terms of the Trust Agreement, determine which network is generally accepted as the Bitcoin network and should therefore be considered

the appropriate network for the Trust’s purposes, there is no guarantee that the Sponsor will choose the network and the associated

digital asset that is ultimately the most valuable fork.

Either of these events could therefore adversely impact the value of the Shares.

As another example of the effects of hard forks on

digital assets, on September 15, 2022, the Ethereum Network completed a move from a proof-of-work model to a proof-of-stake model.

It is possible, however, that a substantial number of users and miners could adopt an incompatible version of the digital asset while

resisting community-led efforts to merge the two chains.

This could result in a permanent fork, as in the case of Ethereum and Ethereum

In addition, many developers have previously initiated hard forks in

the Blockchain to launch new digital assets, such as Bitcoin Gold and Bitcoin Diamond.

To the extent such digital assets compete with

bitcoin, such competition could impact demand for bitcoin and could adversely impact the value of the Shares.

Furthermore, a hard fork can lead to new security concerns.

when the Ethereum and Ethereum Classic networks split in July 2016, replay attacks, in which transactions from one network were rebroadcast

to nefarious effect on the other network, plagued Ethereum platforms through at least October 2016.

An Ethereum platform announced in

July 2016 that it had lost 40,000 Ethereum Classic, worth about $100,000 at that time, as a result of replay attacks.

Similar replay attack

concerns occurred in connection with the Bitcoin Cash and Bitcoin Satoshi’s Vision networks split in November 2018.

Another possible

result of a hard fork is an inherent decrease in the level of security due to significant amounts of mining power remaining on one network

or migrating instead to the new forked network.

After a hard fork, it may become easier for an individual miner or mining pool’s

hashing power to exceed 50% of the processing power of a digital asset network that retained or attracted less mining power, thereby making

digital asset networks that rely on proof-of-work more susceptible to attack.

As another example of the effects of hard forks on digital assets,

on September 15, 2022, the Ethereum Network completed its Merge, moving from a proof-of-work model to a proof-of-stake model.

proof-of-work miners who disagreed with the new consensus mechanism forked the network which resulted in the Ethereum proof-of-work network.

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immediately lost most of its value.

A future fork in the Bitcoin network could adversely

affect the value of the Shares or the ability of the Trust to operate.

In addition to forks, a digital asset may become

subject to a similar occurrence known as an “airdrop.” In an airdrop, the promotors of a new digital asset announce to holders

of another digital asset that such holders will be entitled to claim a certain amount of the new digital asset for free, based on the

fact that they hold such other digital asset.

For example, in March 2017 the promoters of Stellar Lumens announced that anyone that owned

bitcoin as of June 26, 2017 could claim, until August 27, 2017, a certain amount of Stellar Lumens.

Airdrops could create operational

security, legal or regulatory, or other risks for the Trust, the Sponsor, the Bitcoin Custodian, Authorized Participants, or other entities.

Typically, the holder of bitcoin has no discretion in a hard fork;

it merely has the right to claim the new forked asset on a pro rata

basis while it continues to hold the same number of bitcoin.

If such a transaction does occur, the Trust will, at the direction of the

Sponsor, direct the Bitcoin Custodian to irrevocably and permanently abandon, for no consideration, the new cryptocurrency or digital

asset as soon as possible.

In the event of a hard fork of the Bitcoin network, the

Sponsor will use its discretion to determine which network should be considered the appropriate network for the Trust’s purposes,

and in doing so may adversely affect the value of the Shares.

In the event of a hard fork of the Bitcoin network,

the Sponsor will use its discretion to determine, in good faith, which peer-to-peer network, among a group of incompatible forks of the

Bitcoin network, is generally accepted as the Bitcoin network and should therefore be considered the appropriate network for the Trust’s

The Sponsor will base its determination on a variety of then relevant factors, including, but not limited to, the Sponsor’s

beliefs regarding expectations of the core developers of Bitcoin, users, service providers, businesses, miners and other constituencies,

as well as the actual continued acceptance of, mining power on, and community engagement with, the Bitcoin network.

However, even after

taking these factors into consideration, there is no guarantee that the Sponsor’s determination as to the most appropriate network

for the Trust’s purposes will ultimately become the most valuable fork, which may adversely affect the value of the Shares.

Sponsor may also disagree with Shareholders, the Bitcoin Custodian, other service providers and security vendors on what is generally

accepted as Bitcoin and should therefore be considered “bitcoin” for the Trust’s purposes, which may also adversely

affect the value of the Shares.

The Bitcoin Blockchain could be vulnerable to a “51%

attack,” which could adversely affect an investment in the Trust or the ability of the Trust to operate.

If the majority of the processing power dedicated

to mining on the Bitcoin network is controlled by a bad actor or actors (often referred to as a “51% attack”), such persons

may be able to alter the Bitcoin blockchain on which the Bitcoin network and bitcoin transactions rely.

This could occur if the bad actor(s)

were to construct fraudulent blocks or prevent certain transactions from completing in a timely manner, or at all.

It could be possible

for the malicious actor to control, exclude or modify the ordering of transactions, though it could not generate new bitcoin or transactions.

A future fork in the Bitcoin network could adversely affect the value

of the Shares or the ability of the Trust to operate.

In addition to forks, a digital asset may become subject to a similar

occurrence known as an “airdrop.” In an airdrop, the promotors of a new digital asset announce to holders of another digital

asset that such holders will be entitled to claim a certain amount of the new digital asset for free, based on the fact that they hold

such other digital asset.

For example, in March 2017 the promoters of Stellar Lumens announced that anyone that owned bitcoin as of June

26, 2017 could claim, until August 27, 2017, a certain amount of Stellar Lumens.

Airdrops could create operational security, legal or

regulatory, or other risks for the Trust, the Sponsor, the Bitcoin Custodian, Authorized Participants, or other entities.

Typically, the

holder of bitcoin has no discretion in a hard fork;

it merely has the right to claim the new forked asset on a pro rata basis while it

continues to hold the same number of bitcoin.

If such a transaction does occur, the Trust will, at the direction of the Sponsor, direct

the Bitcoin Custodian to irrevocably and permanently abandon, for no consideration, the new cryptocurrency or digital asset as soon as

In the event of a hard fork of the Bitcoin network, the Sponsor

will use its discretion to determine which network should be considered the appropriate network for the Trust’s purposes, and in

doing so may adversely affect the value of the Shares.

In the event of a hard fork of the Bitcoin network, the Sponsor will

use its discretion to determine, in good faith, which peer-to-peer network, among a group of incompatible forks of the Bitcoin network,

is generally accepted as the Bitcoin network and should therefore be considered the appropriate network for the Trust’s purposes.

The Sponsor will base its determination on a variety of then relevant factors, including, but not limited to, the Sponsor’s beliefs

regarding expectations of the core developers of Bitcoin, users, service providers, businesses, miners and other constituencies, as well

as the actual continued acceptance of, mining power on, and community engagement with, the Bitcoin network.

However, even after taking

these factors into consideration, there is no guarantee that the Sponsor’s determination as to the most appropriate network for

the Trust’s purposes will ultimately become the most valuable fork, which may adversely affect the value of the Shares.

may also disagree with Shareholders, the Bitcoin Custodian, other service providers and security vendors on what is generally accepted

as Bitcoin and should therefore be considered “bitcoin” for the Trust’s purposes, which may also adversely affect the

value of the Shares.

The Bitcoin Blockchain could be vulnerable to a “51% attack,”

which could adversely affect an investment in the Trust or the ability of the Trust to operate.

If the majority of the processing power dedicated to mining on the

Bitcoin network is controlled by a bad actor or actors (often referred to as a “51% attack”), such persons may be able to

alter the Bitcoin blockchain on which the Bitcoin network and bitcoin transactions rely.

This could occur if the bad actor(s) were to

construct fraudulent blocks or prevent certain transactions from completing in a timely manner, or at all.

It could be possible for the

malicious actor to control, exclude or modify the ordering of transactions, though it could not generate new bitcoin or transactions.

Further, a bad actor could “double-spend” its own bitcoin ( i.e.

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in the Trust.

Although there are no known reports of malicious

parties taking control of the Bitcoin network, it is believed that certain mining pools may have exceeded the 50% threshold on the Bitcoin

network on a temporary basis.

The possible crossing of the 50% threshold indicates a greater risk that a single mining pool could exert

authority over the validation of Bitcoin transactions, and this risk is heightened if over 50% of the processing power on the network

falls within the jurisdiction of a single governmental authority.

If network participants, including the core developers and the administrators

of mining pools, do not act to ensure greater decentralization of Bitcoin mining processing power, the feasibility of a malicious actor

obtaining control of the processing power on the Bitcoin network will increase, which may adversely affect the value of the Shares.

The 51% threshold is the level which would almost

guarantee a malicious actor’s success.

However, such attacks could in theory occur at thresholds lower than 51% of the available

In addition, a malicious actor may also obtain control over the Bitcoin network through its influence over core developers

by gaining direct control over a core developer or an otherwise influential programmer.

To the extent that the Bitcoin ecosystem does

not grow, the possibility that a malicious actor may be able to obtain control of the processing power or development control on the Bitcoin

network in this manner will remain heightened.

If such an attack occurred, even outside of the Bitcoin

blockchain, investor sentiment in the infrastructure of digital assets generally could be adversely affected, effecting demand and therefore

ultimately the price of a digital asset such as bitcoin, thus adversely impacting the value of the Shares.

Transacting in bitcoin is subject to illicit financing

Although transaction details of peer-to-peer transactions

are recorded on the Bitcoin network, a buyer or seller of bitcoin on a peer-to-peer basis directly on the Bitcoin network may never know

to whom the public key belongs or the true identity of the party with whom it is transacting.

Public key addresses are randomized sequences

of alphanumeric characters that, standing alone, do not provide sufficient information to identify users.

In addition, certain technologies

- such as bitcoin trading platforms commonly referred to as “mixers” - may obscure the origin or chain of custody of bitcoin.

The opaque nature of the market poses asset verification challenges for market participants, regulators and auditors and gives rise to

an increased risk of manipulation and fraud, including the potential for Ponzi schemes, bucket shops and pump and dump schemes.

in the past has been used to facilitate illicit activities.

If bitcoin (or other digital assets) were used to facilitate illicit activities,

businesses that facilitate transactions in bitcoin or other digital assets could be at increased risk of potential criminal or civil lawsuits,

or of having banking or other services cut off, and such digital asset could be removed from digital asset platforms.

Although there are no known reports of malicious parties taking control

of the Bitcoin network, it is believed that certain mining pools may have exceeded the 50% threshold on the Bitcoin network on a temporary

The possible crossing of the 50% threshold indicates a greater risk that a single mining pool could exert authority over the validation

of Bitcoin transactions, and this risk is heightened if over 50% of the processing power on the network falls within the jurisdiction

of a single governmental authority.

If network participants, including the core developers and the administrators of mining pools, do

not act to ensure greater decentralization of Bitcoin mining processing power, the feasibility of a malicious actor obtaining control

of the processing power on the Bitcoin network will increase, which may adversely affect the value of the Shares.

The 51% threshold is the level which would almost guarantee a malicious

actor’s success.

However, such attacks could in theory occur at thresholds lower than 51% of the available hash power.

a malicious actor may also obtain control over the Bitcoin network through its influence over core developers by gaining direct control

over a core developer or an otherwise influential programmer.

To the extent that the Bitcoin ecosystem does not grow, the possibility

that a malicious actor may be able to obtain control of the processing power or development control on the Bitcoin network in this manner

will remain heightened.

If such an attack occurred, even outside of the Bitcoin blockchain,

investor sentiment in the infrastructure of digital assets generally could be adversely affected, effecting demand and therefore ultimately

the price of a digital asset such as bitcoin, thus adversely impacting the value of the Shares.

Transacting in bitcoin is subject to illicit financing risk.

Although transaction details of peer-to-peer transactions are recorded

on the Bitcoin network, a buyer or seller of bitcoin on a peer-to-peer basis directly on the Bitcoin network may never know to whom the

public key belongs or the true identity of the party with whom it is transacting.

Public key addresses are randomized sequences of alphanumeric

characters that, standing alone, do not provide sufficient information to identify users.

In addition, certain technologies - such as

bitcoin trading platforms commonly referred to as “mixers” - may obscure the origin or chain of custody of bitcoin.

nature of the market poses asset verification challenges for market participants, regulators and auditors and gives rise to an increased

risk of manipulation and fraud, including the potential for Ponzi schemes, bucket shops and pump and dump schemes.

Bitcoin in the past

has been used to facilitate illicit activities.

If bitcoin (or other digital assets) were used to facilitate illicit activities, businesses

that facilitate transactions in bitcoin or other digital assets could be at increased risk of potential criminal or civil lawsuits, or

of having banking or other services cut off, and such digital asset could be removed from digital asset platforms.

Any of the aforementioned

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it could increase the likelihood of a malicious actor obtaining control.

Miners ceasing operations would reduce the collective

processing power on the Bitcoin network, which would adversely affect the confirmation process for transactions ( i.e.

, temporarily

decreasing the speed at which blocks are added to the Bitcoin blockchain until the next scheduled adjustment in difficulty for block solutions).

If a reduction in processing power occurs, the Bitcoin network may be more vulnerable to a malicious actor obtaining control in excess

of fifty percent (50%) of the processing power on the Bitcoin network.

As a result, it may be possible for a bad actor to manipulate the

Bitcoin blockchain and hinder transactions.

Any reduction in confidence in the confirmation process or processing power of the Bitcoin

network may adversely affect an investment in the Trust.

Miners ceasing operations would reduce the collective processing power

on the Bitcoin network, which would adversely affect the confirmation process for transactions ( i.e.

, temporarily decreasing the

speed at which blocks are added to the Bitcoin blockchain until the next scheduled adjustment in difficulty for block solutions).

reduction in processing power occurs, the Bitcoin network may be more vulnerable to a malicious actor obtaining control in excess of fifty

percent (50%) of the processing power on the Bitcoin network.

As a result, it may be possible for a bad actor to manipulate the Bitcoin

blockchain and hinder transactions.

Any reduction in confidence in the confirmation process or processing power of the Bitcoin network

may adversely affect an investment in the Trust.

Blockchain technologies are based on the theoretical conjectures

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to technological advances.

Blockchain technologies are premised on theoretical

conjectures as to the impossibility, in practice, of solving certain mathematical problems quickly.

Those conjectures remain unproven,

however, and mathematical or technological advances could conceivably prove them to be incorrect.

Blockchain technology companies may

also be negatively affected by cryptography or other technological advances, such as the development of quantum computers with significantly

more power than computers presently available, that undermine or vitiate the cryptographic consensus mechanism underpinning the Bitcoin

blockchain and other distributed ledger protocols.

If either of these events were to happen, markets that rely on blockchain technologies,

such as the Bitcoin network, could quickly collapse, and an investment in the Trust may be adversely affected.

The price of bitcoin on the bitcoin market has exhibited

periods of extreme volatility, which could have a negative impact on the performance of the Trust.

The price of bitcoin as determined by the bitcoin

market has experienced periods of extreme volatility and may be influenced by a wide variety of factors.

Speculators and investors who

seek to profit from trading and holding bitcoin generate a significant portion of bitcoin demand.

Such speculation regarding the potential

future appreciation in the value of bitcoin may cause the price of bitcoin to increase.

Conversely, a decrease in demand for or speculative

interest regarding bitcoin may cause the price to decline.

The volatility of the price of bitcoin, particularly arising from speculative

activity, may have a negative impact on the performance of the Trust.

The price of bitcoin may become closely correlated with

other asset classes

Returns from investing in bitcoin have at times diverged

from and/or have not been correlated with those associated with other asset classes, but there can be no assurance that there will be

any such divergence, either generally or with respect to any particular asset class, or that price movements will not be correlated.

addition, there is no assurance that bitcoin will maintain its value in the long, intermediate, short, or any other term.

that the price of bitcoin declines, the value of the Shares is likely to decline proportionately.

Prices of bitcoin may be affected due to stablecoins, the

activities of stablecoin issuers and their regulatory treatment

While the Trust does not invest in “stablecoins,”

such as those digital assets that are pegged to the U.S.

Blockchain technologies are premised on theoretical conjectures as

to the impossibility, in practice, of solving certain mathematical problems quickly.

Those conjectures remain unproven, however, and mathematical

or technological advances could conceivably prove them to be incorrect.

Blockchain technology companies may also be negatively affected

by cryptography or other technological advances, such as the development of quantum computers with significantly more power than computers

presently available, that undermine or vitiate the cryptographic consensus mechanism underpinning the Bitcoin blockchain and other distributed

ledger protocols.

If either of these events were to happen, markets that rely on blockchain technologies, such as the Bitcoin network,

could quickly collapse, and an investment in the Trust may be adversely affected.

The price of bitcoin on the bitcoin market has exhibited periods

of extreme volatility, which could have a negative impact on the performance of the Trust.

The price of bitcoin as determined by the bitcoin market has experienced

periods of extreme volatility and may be influenced by a wide variety of factors.

Speculators and investors who seek to profit from trading

and holding bitcoin generate a significant portion of bitcoin demand.

Such speculation regarding the potential future appreciation in

the value of bitcoin may cause the price of bitcoin to increase.

Conversely, a decrease in demand for or speculative interest regarding

bitcoin may cause the price to decline.

The volatility of the price of bitcoin, particularly arising from speculative activity, may have

a negative impact on the performance of the Trust.

The price of bitcoin may become closely correlated with other

asset classes

Returns from investing in bitcoin have at times diverged from and/or

have not been correlated with those associated with other asset classes, but there can be no assurance that there will be any such divergence,

either generally or with respect to any particular asset class, or that price movements will not be correlated.

In addition, there is

no assurance that bitcoin will maintain its value in the long, intermediate, short, or any other term.

In the event that the price of

bitcoin declines, the value of the Shares is likely to decline proportionately.

Prices of bitcoin may be affected due to stablecoins, the activities

of stablecoin issuers and their regulatory treatment

While the Trust does not invest in “stablecoins,” such

as those digital assets that are pegged to the U.S.

dollar and holders expect to receive one U.S.

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and affect the value of bitcoin, and in turn impact an investment in the Shares.

Currently, there is relatively small use of bitcoin in

the retail and commercial marketplace in comparison to relatively large use by speculators and those perceiving bitcoin as a store of

value, thus contributing to price volatility that could adversely affect an investment in the Trust.

Certain merchants and major retail and commercial

businesses have only recently begun accepting bitcoin and the Bitcoin network as a means of payment for goods and services.

of bitcoin to pay such retail and commercial outlets, however, remains limited.

Yet, market speculators and investors seeking to profit

from the short- or long-term holding of bitcoin generate a significant portion of demand for bitcoin, which can contribute to price volatility,

which in turn can make bitcoin less attractive to merchants and commercial parties as a means of payment.

A lack of expansion by bitcoin

into retail and commercial markets or a contraction of such use may result in a reduction in the price of bitcoin, which could adversely

affect an investment in the Trust.

Currently, there is relatively small use of bitcoin in the retail

and commercial marketplace in comparison to relatively large use by speculators and those perceiving bitcoin as a store of value, thus

contributing to price volatility that could adversely affect an investment in the Trust.

Certain merchants and major retail and commercial businesses have only

recently begun accepting bitcoin and the Bitcoin network as a means of payment for goods and services.

Consumer use of bitcoin to pay

such retail and commercial outlets, however, remains limited.

Yet, market speculators and investors seeking to profit from the short-

or long-term holding of bitcoin generate a significant portion of demand for bitcoin, which can contribute to price volatility, which

in turn can make bitcoin less attractive to merchants and commercial parties as a means of payment.

A lack of expansion by bitcoin into

retail and commercial markets or a contraction of such use may result in a reduction in the price of bitcoin, which could adversely affect

an investment in the Trust.

Bitcoin platforms on which bitcoin trades are relatively new

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Risk of Fraud and Market Manipulation.

Over the past several years, a number of

bitcoin platforms have been closed or faced issues due to fraud, manipulation, failure, security breaches or governmental regulations.

Bitcoin platforms may be more exposed to the risk of market manipulation than exchanges for more traditional assets.

Some bitcoin platforms

are not subject to direct regulatory oversight, and some bitcoin platforms that are subject to such oversight typically must comply with

minimum net worth, cybersecurity, and anti-money laundering requirements, but are not typically required to protect customers or their

markets to the same extent that regulated securities exchanges or futures exchanges are required to do so.

Tools to detect and deter fraudulent

or manipulative trading activities such as market manipulation, front-running of trades, and wash-trading may not be available to or employed

by digital asset platforms or may not exist at all.

The SEC has identified possible sources of fraud and manipulation in the bitcoin market

generally, including, among others (1) “wash trading”;

(2) persons with a dominant position in bitcoin manipulating bitcoin

Over the past several years, a number of bitcoin platforms

have been closed or faced issues due to fraud, manipulation, failure, security breaches or governmental regulations.

Bitcoin platforms

may be more exposed to the risk of market manipulation than exchanges for more traditional assets.

Some bitcoin platforms are not subject

to direct regulatory oversight, and some bitcoin platforms that are subject to such oversight typically must comply with minimum net worth,

cybersecurity, and anti-money laundering requirements, but are not typically required to protect customers or their markets to the same

extent that regulated securities exchanges or futures exchanges are required to do so.

Tools to detect and deter fraudulent or manipulative

trading activities such as market manipulation, front-running of trades, and wash-trading may not be available to or employed by digital

asset platforms or may not exist at all.

The SEC has identified possible sources of fraud and manipulation in the bitcoin market generally,

including, among others (1) “wash trading”;

(2) persons with a dominant position in bitcoin manipulating bitcoin pricing;

(3) hacking of the Bitcoin network and trading platforms;

(4) malicious control of the Bitcoin network;

(5) trading based on

material, non-public information (for example, plans of market participants to significantly increase or decrease their holdings in bitcoin,

new sources of demand for bitcoin) or based on the dissemination of false and misleading information;

(5) trading based on material,

non-public information (for example, plans of market participants to significantly increase or decrease their holdings in bitcoin, new

sources of demand for bitcoin) or based on the dissemination of false and misleading information;

(6) manipulative activity involving

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Spot markets may be exposed to wash trading.

Spot markets on which bitcoin trades may

be susceptible to wash trading.

Wash trading occurs when offsetting trades are entered into for other than bona fide reasons, such as

the desire to inflate reported trading volumes.

Wash trading may be motivated by non-economic reasons, such as a desire for increased

visibility on popular websites that monitor markets for digital assets so as to improve their attractiveness to investors who look for

maximum liquidity, or it may be motivated by the ability to attract listing fees from token issuers who seek the most liquid and high-volume

Spot markets on which bitcoin trades may be susceptible

to wash trading.

Wash trading occurs when offsetting trades are entered into for other than bona fide reasons, such as the desire to

inflate reported trading volumes.

Wash trading may be motivated by non-economic reasons, such as a desire for increased visibility

on popular websites that monitor markets for digital assets so as to improve their attractiveness to investors who look for maximum

liquidity, or it may be motivated by the ability to attract listing fees from token issuers who seek the most liquid and high-volume

exchanges on which to list their coins.

Results of wash trading may include unexpected obstacles to trade and erroneous investment decisions

based on false information.

Any actual or perceived false trading in the digital asset markets, and any other fraudulent or manipulative

acts and practices, could adversely affect the value of bitcoin and/or negatively affect the market perception of bitcoin.

To the extent

that wash trading either occurs or appears to occur in spot markets on which bitcoin trades, investors may develop negative perceptions

about bitcoin and the digital assets industry more broadly, which could adversely impact the price bitcoin and, therefore, the price of

Wash trading also may place more legitimate digital asset platforms at a relative competitive disadvantage.

Results of wash trading may include unexpected obstacles to trade and erroneous investment

decisions based on false information.

Any actual or perceived false trading in the digital asset markets, and any other fraudulent

or manipulative acts and practices, could adversely affect the value of bitcoin and/or negatively affect the market perception of

To the extent that wash trading either occurs or appears to occur in spot markets on which bitcoin trades, investors may

develop negative perceptions about bitcoin and the digital assets industry more broadly, which could adversely impact the price of

bitcoin and, therefore, the price of Shares.

Wash trading also may place more legitimate digital asset platforms at a relative

competitive disadvantage.

Price Volatility.

Many bitcoin platforms lack certain safeguards

established by more traditional exchanges to enhance the stability of trading on the platform, such as measures designed to prevent sudden

drops in value of items traded on the exchange ( i.e.

Many bitcoin platforms lack certain safeguards established

by more traditional exchanges to enhance the stability of trading on the platform, such as measures designed to prevent sudden drops in

value of items traded on the exchange ( i.e.

, “flash crashes”).

As a result, the prices of cryptocurrencies,

including bitcoin, on exchanges may be subject to larger and more frequent sudden declines than assets traded on more traditional platforms.

As a result, the prices of cryptocurrencies, including

bitcoin, on exchanges may be subject to larger and more frequent sudden declines than assets traded on more traditional platforms.

Sales of new bitcoin may cause the price of bitcoin to decline,

which could negatively affect an investment in the Trust.

Newly created bitcoin (“newly mined bitcoin”)

are generated through a process referred to as “mining.” If entities engaged in bitcoin mining choose not to hold the newly

mined bitcoin, and, instead, make them available for sale, there can be downward pressure on the price of bitcoin.

A bitcoin mining operation

may be more likely to sell a higher percentage of its newly created bitcoin, and more rapidly so, if it is operating at a low profit margin,

Newly created bitcoin (“newly mined bitcoin”) are generated

through a process referred to as “mining.” If entities engaged in bitcoin mining choose not to hold the newly mined bitcoin,

and, instead, make them available for sale, there can be downward pressure on the price of bitcoin.

A bitcoin mining operation may be

more likely to sell a higher percentage of its newly created bitcoin, and more rapidly so, if it is operating at a low profit margin,

thus reducing the price of bitcoin.

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efforts to increase the volume of transactions may not be successful.

Many digital asset networks face significant scaling

challenges due to the fact that public blockchains generally face a tradeoff between security and scalability.

One means through which

public blockchains achieve security is decentralization, meaning that no intermediary is responsible for securing and maintaining these

For example, a greater degree of decentralization generally means a given digital asset network is less susceptible to manipulation

Achieving decentralization may mean that every single node on a given digital asset network is responsible for securing the

system by processing every transaction and maintaining a copy of the entire state of the network.

However, this may involve tradeoffs

from an efficiency perspective, impose constraints on throughput or have other consequences (see the next risk factor regarding the Bitcoin

network’s decentralized governance structure).

In an effort to increase the volume of transactions

that can be processed on a given digital asset network, many digital assets are being upgraded with various features to increase the speed

and throughput of digital asset transactions.

In August 2017, the Bitcoin network was upgraded with a technical feature known as “Segregated

Witness” with the promise of increasing the number of transactions per second that can be handled on-chain and enabling so-called

second layer solutions, such as the Lightning Network or payment channels, that increase transaction throughput by processing certain

transactions outside the main Bitcoin blockchain.

Many digital asset networks face significant scaling challenges due

to the fact that public blockchains generally face a tradeoff between security and scalability.

One means through which public blockchains

achieve security is decentralization, meaning that no intermediary is responsible for securing and maintaining these systems.

a greater degree of decentralization generally means a given digital asset network is less susceptible to manipulation or capture.

decentralization may mean that every single node on a given digital asset network is responsible for securing the system by processing

every transaction and maintaining a copy of the entire state of the network.

However, this may involve tradeoffs from an efficiency perspective,

impose constraints on throughput or have other consequences (see the next risk factor regarding the Bitcoin network’s decentralized

governance structure).

In an effort to increase the volume of transactions that can be processed

on a given digital asset network, many digital assets are being upgraded with various features to increase the speed and throughput of

digital asset transactions.

In August 2017, the Bitcoin network was upgraded with a technical feature known as “Segregated Witness”

with the promise of increasing the number of transactions per second that can be handled on-chain and enabling so-called second layer

solutions, such as the Lightning Network or payment channels, that increase transaction throughput by processing certain transactions

outside the main Bitcoin blockchain.

However, this upgrade may fail to achieve the expected benefits or widespread adoption.

If increases in throughput on the Bitcoin network

lag behind growth in usage of bitcoin, average fees and settlement times may increase considerably.

For example, the Bitcoin network has

been, at times, subject to congestion, which has led to increased transaction fees.

Increased fees and decreased settlement speeds could

preclude certain uses for bitcoin ( e.g.

, micropayments), and could reduce demand for, and the price of, bitcoin, which could adversely

impact the value of the Shares.

Many developers are actively researching and testing

scalability solutions for public blockchains that do not necessarily result in lower levels of security or decentralization.

there is no guarantee that any of the mechanisms in place or being explored for increasing the scale of settlement of the Bitcoin network

transactions will be effective, or how long these mechanisms will take to become effective, which could adversely impact the value of

If increases in throughput on the Bitcoin network lag behind growth

in usage of bitcoin, average fees and settlement times may increase considerably.

For example, the Bitcoin network has been, at times,

subject to congestion, which has led to increased transaction fees.

Increased fees and decreased settlement speeds could preclude certain

uses for bitcoin ( e.g.

, micropayments), and could reduce demand for, and the price of, bitcoin, which could adversely impact the

value of the Shares.

Many developers are actively researching and testing scalability solutions

for public blockchains that do not necessarily result in lower levels of security or decentralization.

However, there is no guarantee

that any of the mechanisms in place or being explored for increasing the scale of settlement of the Bitcoin network transactions will

be effective, or how long these mechanisms will take to become effective, which could adversely impact the value of the Shares.

The Bitcoin network’s decentralized governance structure

may negatively affect its ability to grow and respond to challenges.

The governance of decentralized networks, such as

the Bitcoin network, is by voluntary consensus and open competition.

In other words, the Bitcoin network has no central decision-making

body or clear manner in which participants can come to an agreement other than through voluntary, widespread consensus.

As a result, a

lack of widespread consensus in the governance of the Bitcoin network may adversely affect the network’s utility and ability to

adapt and face challenges, including technical and scaling challenges.

Historically the development of the source code of the Bitcoin

network has been overseen by the core developers.

However, the Bitcoin network would cease to operate successfully without both miners

and users, and the core developers cannot formally compel them to adopt the changes to the source code desired by core developers, or

to continue to render services or participate in the Bitcoin network.

As a general matter, the governance of the Bitcoin network generally

depends on most of members of the Bitcoin community ultimately reaching some form of voluntary agreement on significant changes.

The decentralized governance of the Bitcoin network

may make it difficult to find or implement solutions or marshal sufficient effort to overcome existing or future problems, especially

protracted ones requiring substantial directed effort and resource commitment over a long period of time, such as scaling challenges.

Deeply held differences of the opinion have led to forks in the past, such as between Bitcoin and Bitcoin Cash, and could lead to additional

forks in the future, with potentially divisive effects.

The Bitcoin network’s failure to overcome governance challenges could exacerbate

problems experienced by the network or cause the network to fail to meet the needs of its users, and could cause users, miners, and developer

talent to abandon the Bitcoin network or to choose competing blockchain protocols, or lead to a drop in speculative interest, which could

cause the value of bitcoin to decline.

If the Bitcoin community is unable to reach consensus in the future, it could have adverse consequences

for the Bitcoin network or lead to a fork, which could affect the value of bitcoin.

The governance of decentralized networks, such as the Bitcoin network,

is by voluntary consensus and open competition.

In other words, the Bitcoin network has no central decision-making body or clear manner

in which participants can come to an agreement other than through voluntary, widespread consensus.

As a result, a lack of widespread consensus

in the governance of the Bitcoin network may adversely affect the network’s utility and ability to adapt and face challenges, including

technical and scaling challenges.

Historically the development of the source code of the Bitcoin network has been overseen by the core

However, the Bitcoin network would cease to operate successfully without both miners and users, and the core developers cannot

formally compel them to adopt the changes to the source code desired by core developers, or to continue to render services or participate

in the Bitcoin network.

As a general matter, the governance of the Bitcoin network generally depends on most of members of the Bitcoin

community ultimately reaching some form of voluntary agreement on significant changes.

The decentralized governance of the Bitcoin network may make it difficult

to find or implement solutions or marshal sufficient effort to overcome existing or future problems, especially protracted ones requiring

substantial directed effort and resource commitment over a long period of time, such as scaling challenges.

Deeply held differences of

the opinion have led to forks in the past, such as between Bitcoin and Bitcoin Cash, and could lead to additional forks in the future,

with potentially divisive effects.

The Bitcoin network’s failure to overcome governance challenges could exacerbate problems experienced

by the network or cause the network to fail to meet the needs of its users, and could cause users, miners, and developer talent to abandon

the Bitcoin network or to choose competing blockchain protocols, or lead to a drop in speculative interest, which could cause the value

of bitcoin to decline.

If the Bitcoin community is unable to reach consensus in the future, it could have adverse consequences for the

Bitcoin network or lead to a fork, which could affect the value of bitcoin.

New competing digital assets may pose a challenge to bitcoin’s

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may have a negative impact on the performance of the Trust.

The Bitcoin network and bitcoin, as an asset, hold

a “first-to-market” advantage over other digital assets.

This first-to-market advantage has contributed to the Bitcoin network

evolving into the most well-developed network of any digital asset.

The Bitcoin network enjoys the largest user base and has more mining

power in use to secure the Bitcoin blockchain than any other digital asset.

Having a large mining network could provide users confidence

regarding the security and long-term stability of the Bitcoin network.

This in turn could create a domino effect that inures to the benefit

of the Bitcoin network - namely, the advantage of more users and miners makes a digital asset more secure, which potentially makes it

more attractive to new users and miners, resulting in a network effect that potentially strengthens the first-to-market advantage.

despite the first-mover advantage of the Bitcoin network over other digital assets, it is possible that real or perceived shortcomings

in the Bitcoin network, or technological, regulatory or other developments, could result in a decline in popularity and acceptance of

bitcoin and the Bitcoin network, and other digital currencies and trading systems could become more widely accepted and used than the

Bitcoin network.

In addition, leading technologies and/or payments

companies, from Meta Platforms, Inc.

(formerly known as Facebook) to Paypal, have explored plans, enacted plans and/or introduced various

digital asset and electronic payments initiatives.

Such initiatives could adversely affect the value of bitcoin and digital assets, in

particular where technical limitations or perceived disadvantages of bitcoin or the Bitcoin network are compared to such other initiatives.

These could include operational cost exceeding the award for solving blocks or transaction fees, and increased transaction fees which

may adversely affect the usage of the Bitcoin network.

Competition from the emergence or growth of alternative

digital assets and smart contracts platforms, such as Ethereum, Solana, Avalanche, Polkadot, or Cardano, could have a negative impact

on the demand for, and price of, bitcoin and thereby adversely affect the value of the Shares.

The Bitcoin network and bitcoin, as an asset, hold a “first-to-market”

advantage over other digital assets.

This first-to-market advantage has contributed to the Bitcoin network evolving into the most well-developed

network of any digital asset.

The Bitcoin network enjoys the largest user base and has more mining power in use to secure the Bitcoin

blockchain than any other digital asset.

Having a large mining network could provide users confidence regarding the security and long-term

stability of the Bitcoin network.

This in turn could create a domino effect that inures to the benefit of the Bitcoin network - namely,

the advantage of more users and miners makes a digital asset more secure, which potentially makes it more attractive to new users and

miners, resulting in a network effect that potentially strengthens the first-to-market advantage.

However, despite the first-mover advantage

of the Bitcoin network over other digital assets, it is possible that real or perceived shortcomings in the Bitcoin network, or technological,

regulatory or other developments, could result in a decline in popularity and acceptance of bitcoin and the Bitcoin network, and other

digital currencies and trading systems could become more widely accepted and used than the Bitcoin network.

In addition, leading technologies and/or payments companies, from Meta

Platforms, Inc.

(formerly known as Facebook) to Paypal, have explored plans, enacted plans and/or introduced various digital asset and

electronic payments initiatives.

Such initiatives could adversely affect the value of bitcoin and digital assets, in particular where

technical limitations or perceived disadvantages of bitcoin or the Bitcoin network are compared to such other initiatives.

include operational cost exceeding the award for solving blocks or transaction fees, and increased transaction fees which may adversely

affect the usage of the Bitcoin network.

Competition from the emergence or growth of alternative digital assets

and smart contracts platforms, such as Ethereum, Solana, Avalanche, Polkadot, or Cardano, could have a negative impact on the demand for,

and price of, bitcoin and thereby adversely affect the value of the Shares.

The Trust and the Sponsor face competition from competing products.

The Trust and the Sponsor face competition with respect

to the creation of competing exchange-traded bitcoin products.

If the SEC were to approve many or all of the currently pending applications

for such exchange-traded bitcoin products, many or all of such products, including the Trust, could fail to acquire substantial assets,

initially or at all.

The Trust’s competitors may also charge a substantially lower fee than the Sponsor’s Fee in order to

achieve initial market acceptance and scale.

Accordingly, the Sponsor’s competitors may commercialize a competing product more rapidly

or effectively than the Sponsor is able to, which could adversely affect the Sponsor’s competitive position and the likelihood that

the Trust will achieve initial market acceptance and could have a detrimental effect on the scale and sustainability of the Trust.

the Trust fails to achieve sufficient scale, approximately $450 million in assets or more, due to competition, limited interest or otherwise,

the Sponsor may have difficulty in covering the costs associated with launching and maintaining the Trust and such shortfalls could impact

the Sponsor’s ability to properly invest in robust ongoing operations and controls of the Trust to minimize the risk of operating

events, errors, or other forms of losses to the Shareholders.

In addition, the Trust may also fail to attract adequate liquidity in the

secondary market due to such competition, resulting in a sub-standard number of Authorized Participants willing to make a market in the

Shares, which in turn could result in a significant premium or discount in the Shares for extended periods and the Trust’s failure

to reflect the performance of the price of bitcoin.

The Trust and the Sponsor face competition with respect to the creation

of competing exchange-traded bitcoin products.

The Trust, could fail to acquire substantial assets, initially or at all.

competitors may also charge a substantially lower fee than the Sponsor’s Fee in order to achieve initial market acceptance and scale.

Accordingly, the Sponsor’s competitors may commercialize a competing product more rapidly or effectively than the Sponsor is able

to, which could adversely affect the Sponsor’s competitive position and the likelihood that the Trust will achieve initial market

acceptance and could have a detrimental effect on the scale and sustainability of the Trust.

If the Trust fails to achieve sufficient

scale, approximately $450 million in assets or more, due to competition, limited interest or otherwise, the Sponsor may have difficulty

in covering the costs associated with launching and maintaining the Trust and such shortfalls could impact the Sponsor’s ability

to properly invest in robust ongoing operations and controls of the Trust to minimize the risk of operating events, errors, or other forms

of losses to the Shareholders.

In addition, the Trust may also fail to attract adequate liquidity in the secondary market due to such

competition, resulting in a sub-standard number of Authorized Participants willing to make a market in the Shares, which in turn could

result in a significant premium or discount in the Shares for extended periods and the Trust’s failure to reflect the performance

of the price of bitcoin.

Competition from central bank digital currencies (“CBDCs”)

and other initiatives could adversely affect the value of bitcoin and other digital assets.

Central banks in certain countries have introduced

digital forms of legal tender (CBDCs).

Central banks in certain countries have introduced digital forms of

legal tender (CBDCs).

Research suggests over 100 countries are exploring CBDCs.

Whether or not they incorporate blockchain

or similar technology, CBDCs, as legal tender in the issuing jurisdiction, could have an advantage in competing with, or replace, bitcoin

and other cryptocurrencies as a medium of exchange or store of value.

Central banks and other governmental entities have also announced

cooperative initiatives and consortia with private sector entities, with the goal of leveraging blockchain and other technology to reduce

friction in cross-border and interbank payments and settlement, and commercial banks and other financial institutions have also recently

announced a number of initiatives of their own to incorporate new technologies, including blockchain and similar technologies, into their

payments and settlement activities, which could compete with, or reduce the demand for, bitcoin.

As a result, the value of bitcoin could

decrease, which could adversely affect an investment in the Trust.

Whether or not they incorporate blockchain or similar

technology, CBDCs, as legal tender in the issuing jurisdiction, could have an advantage in competing with, or replace, bitcoin and other

cryptocurrencies as a medium of exchange or store of value.

Central banks and other governmental entities have also announced cooperative

initiatives and consortia with private sector entities, with the goal of leveraging blockchain and other technology to reduce friction

in cross-border and interbank payments and settlement, and commercial banks and other financial institutions have also recently announced

a number of initiatives of their own to incorporate new technologies, including blockchain and similar technologies, into their payments

and settlement activities, which could compete with, or reduce the demand for, bitcoin.

As a result, the value of bitcoin could decrease,

which could adversely affect an investment in the Trust.

The scheduled mining of additional bitcoin and their subsequent

sale may cause the price of bitcoin to decline, which could negatively affect an investment in the Trust.

The Bitcoin network is designed to periodically reduce

the fixed award given to miners for solving new blocks (the “block reward”), most recently in April 2024, when the block reward

reduced from 6.25 to 3.125 bitcoin.

The next such event, as referred to as a “halving” event, is anticipated to occur at some

point between March 2028 to May 2028.

As the block reward continues to decrease over time, the mining incentive structure may transition

to a higher reliance on transaction confirmation fees in order to incentivize miners to continue to dedicate processing power to the blockchain.

If transaction confirmation fees become too high, the marketplace may be reluctant to use bitcoin.

The Bitcoin network is designed to periodically reduce the fixed award

given to miners for solving new blocks (the “block reward”), most recently in April 2024, when the block reward reduced from

6.25 to 3.125 bitcoin.

The next such event, as referred to as a “halving” event, is anticipated to occur at some point between

March 2028 to May 2028.

As the block reward continues to decrease over time, the mining incentive structure may transition to a higher

reliance on transaction confirmation fees in order to incentivize miners to continue to dedicate processing power to the blockchain.

transaction confirmation fees become too high, the marketplace may be reluctant to use bitcoin.

Increased transaction fees may motivate

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in the Trust.

To the extent that any miners cease to record transactions

that do not include the payment of a transaction fee in mined blocks or do not record a transaction because the transaction fee is too

low, such transactions will not be recorded on the Bitcoin blockchain until a block is mined by a miner who does not require the payment

of transaction fees or is willing to accept a lower fee.

Also, some miners have financed the acquisition of mining equipment or the development

or construction of infrastructure to perform mining activities by borrowing.

If such miners experience financial difficulties and are

unable to pay back their borrowings, their mining capacity could become unavailable to the Bitcoin network, which could conceivably result

in disruptions in recording transactions on the Bitcoin network.

Any widespread delays or disruptions in the recording of transactions

could result in a loss of confidence in the Bitcoin network and disrupt transactions with Authorized Participants, bitcoin more broadly

or otherwise adversely impact the value of Shares.

Ultimately, if the awards of new bitcoin for solving

blocks declines and transaction fees for recording transactions are not sufficiently high to exceed the costs of mining, miners may operate

at a loss or cease operations.

If the award does not exceed the costs of mining in the long-term, miners may have to cease operations

If miners cease their operations, this could have a negative impact on the Bitcoin network and could adversely affect the value

of the bitcoin held by the Trust.

To the extent that any miners cease to record transactions that do

not include the payment of a transaction fee in mined blocks or do not record a transaction because the transaction fee is too low, such

transactions will not be recorded on the Bitcoin blockchain until a block is mined by a miner who does not require the payment of transaction

fees or is willing to accept a lower fee.

Also, some miners have financed the acquisition of mining equipment or the development or construction

of infrastructure to perform mining activities by borrowing.

If such miners experience financial difficulties and are unable to pay back

their borrowings, their mining capacity could become unavailable to the Bitcoin network, which could conceivably result in disruptions

in recording transactions on the Bitcoin network.

Any widespread delays or disruptions in the recording of transactions could result in

a loss of confidence in the Bitcoin network and disrupt transactions with Authorized Participants, bitcoin more broadly or otherwise adversely

impact the value of Shares.

Ultimately, if the awards of new bitcoin for solving blocks declines

and transaction fees for recording transactions are not sufficiently high to exceed the costs of mining, miners may operate at a loss

or cease operations.

If the award does not exceed the costs of mining in the long-term, miners may have to cease operations entirely.

If miners cease their operations, this could have a negative impact on the Bitcoin network and could adversely affect the value of the

bitcoin held by the Trust.

Miners could act in collusion to raise transaction fees, which

may adversely affect the usage of the Bitcoin network.

Bitcoin miners collect fees for each transaction

they confirm.

Miners validate unconfirmed transactions by adding the previously unconfirmed transactions to new blocks in the blockchain.

Miners are not forced to confirm any specific transaction, but they are economically incentivized to confirm valid transactions as a means

of collecting fees.

To the extent that any miners cease to record transactions in solved blocks, such transactions will not be recorded

on the Bitcoin blockchain until a block is solved by a miner who does not require the payment of transaction fees.

Miners have historically

accepted relatively low transaction confirmation fees.

If miners collude in an anticompetitive manner to reject low transaction fees,

then bitcoin users could be forced to pay higher fees, thus reducing the attractiveness of the bitcoin network, or to wait longer times

for their transactions to be validated by a miner who does not require the payment of a transaction fee.

Bitcoin mining occurs globally,

and it may be difficult for authorities to apply antitrust regulations or similar doctrines across multiple jurisdictions.

Any collusion

among miners may adversely impact an investment in the Trust or the ability of the Trust to operate.

Bitcoin miners collect fees for each transaction they confirm.

validate unconfirmed transactions by adding the previously unconfirmed transactions to new blocks in the blockchain.

Miners are not forced

to confirm any specific transaction, but they are economically incentivized to confirm valid transactions as a means of collecting fees.

To the extent that any miners cease to record transactions in solved blocks, such transactions will not be recorded on the Bitcoin blockchain

until a block is solved by a miner who does not require the payment of transaction fees.

Miners have historically accepted relatively

low transaction confirmation fees.

If miners collude in an anticompetitive manner to reject low transaction fees, then bitcoin users could

be forced to pay higher fees, thus reducing the attractiveness of the bitcoin network, or to wait longer times for their transactions

to be validated by a miner who does not require the payment of a transaction fee.

Bitcoin mining occurs globally, and it may be difficult

for authorities to apply antitrust regulations or similar doctrines across multiple jurisdictions.

Any collusion among miners may adversely

impact an investment in the Trust or the ability of the Trust to operate.

As technology advances, miners may be unable to acquire the digital

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the Bitcoin network and an investment in the Trust.

Due to the increasing demand for digital asset mining

hardware, miners may be unable to acquire the proper mining equipment or suitable amount of equipment necessary to continue their operations

or develop and launch their operations.

In addition, because successful mining of a digital asset that uses “proof of work”

validation requires maintaining or exceeding a certain level of computing power relative to other validators, miners will need to upgrade

their mining hardware periodically to keep up with their competition.

The development of supercomputers with disproportionate computing

power may threaten the integrity of the bitcoin market by concentrating mining power, which would make it unprofitable for other miners

The expense of purchasing or upgrading new equipment may be substantial and diminish returns to miners dramatically.

in miners may result in a decrease in the value of bitcoin and the value of the Trust.

Due to the increasing demand for digital asset mining hardware, miners

may be unable to acquire the proper mining equipment or suitable amount of equipment necessary to continue their operations or develop

and launch their operations.

In addition, because successful mining of a digital asset that uses “proof of work” validation

requires maintaining or exceeding a certain level of computing power relative to other validators, miners will need to upgrade their mining

hardware periodically to keep up with their competition.

The development of supercomputers with disproportionate computing power may threaten

the integrity of the bitcoin market by concentrating mining power, which would make it unprofitable for other miners to mine.

of purchasing or upgrading new equipment may be substantial and diminish returns to miners dramatically.

A decline in miners may result

in a decrease in the value of bitcoin and the value of the Trust.

If profit margins of bitcoin mining operations are not high,

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an investment in the Trust.

Bitcoin network mining operations have rapidly evolved

over the past several years from individual users mining with computer processors, graphics processing units and first-generation ASIC

(application-specific integrated circuit) machines.

Bitcoin network mining operations have rapidly evolved over the past

several years from individual users mining with computer processors, graphics processing units and first-generation ASIC (application-specific

integrated circuit) machines.

New processing power is predominantly added to the Bitcoin network currently by “professionalized”

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could increase the supply of bitcoin on the bitcoin market, creating downward pressure on the price of bitcoin.

A professional mining operation operating at a low

profit margin may be more likely to sell a higher percentage of its newly mined bitcoin rapidly, and it may partially or completely cease

operations if its profit margin is negative.

The reduction in mining rewards of bitcoin, including block reward halving events, which

are events that occur after a specific period of time that reduce the block reward earned by miners, could be inadequate to incentivize

miners to continue to perform mining activities.

In a low profit margin environment, a higher percentage of the new bitcoin mined each

day will be sold into the bitcoin market more rapidly, thereby reducing bitcoin prices.

The network effect of reduced profit margins resulting

in greater sales of newly mined bitcoin could result in a reduction in the price of bitcoin that could adversely affect an investment

in the Trust.

A professional mining operation operating at a low profit margin may

be more likely to sell a higher percentage of its newly mined bitcoin rapidly, and it may partially or completely cease operations if

its profit margin is negative.

The reduction in mining rewards of bitcoin, including block reward halving events, which are events that

occur after a specific period of time that reduce the block reward earned by miners, could be inadequate to incentivize miners to continue

to perform mining activities.

In a low profit margin environment, a higher percentage of the new bitcoin mined each day will be sold into

the bitcoin market more rapidly, thereby reducing bitcoin prices.

The network effect of reduced profit margins resulting in greater sales

of newly mined bitcoin could result in a reduction in the price of bitcoin that could adversely affect an investment in the Trust.

Congestion or delay in the Bitcoin network may delay purchases

or sales of bitcoin by the Trust.

The size of each block on the Bitcoin blockchain

is currently limited and is significantly below the level that centralized systems can provide with regard to volume of transaction processing.

Increased transaction volume on the Bitcoin network could result in delays in the recording of transactions due to congestion in the Bitcoin

Moreover, unforeseen system failures, disruptions in operations, or poor connectivity may also result in delays in the recording

of transactions on the Bitcoin network.

Any delay in the Bitcoin network could affect the Trust’s ability to buy or sell bitcoin

at an advantageous price, or may create the opportunity for a bad actor to double spend bitcoin, resulting in decreased confidence in

the Bitcoin network.

Over the longer term, delays in confirming transactions could reduce the attractiveness to merchants and other commercial

parties as a means of payment.

The size of each block on the Bitcoin blockchain is currently limited

and is significantly below the level that centralized systems can provide with regard to volume of transaction processing.

Increased transaction

volume on the Bitcoin network could result in delays in the recording of transactions due to congestion in the Bitcoin network.

unforeseen system failures, disruptions in operations, or poor connectivity may also result in delays in the recording of transactions

on the Bitcoin network.

Any delay in the Bitcoin network could affect the Trust’s ability to buy or sell bitcoin at an advantageous

price, or may create the opportunity for a bad actor to double spend bitcoin, resulting in decreased confidence in the Bitcoin network.

Over the longer term, delays in confirming transactions could reduce the attractiveness to merchants and other commercial parties as a

means of payment.

As a result, the Bitcoin network and the value of the Trust would be adversely affected.

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change may raise the economic and societal costs of bitcoin mining.

Bitcoin mining involves advanced computers that consume

significant energy, which may have a negative environmental impact and give rise to public opinion against allowing, or government regulations

restricting, the use of electricity for mining operations.

Bitcoin mining involves advanced computers that consume significant

energy, which may have a negative environmental impact and give rise to public opinion against allowing, or government regulations restricting,

the use of electricity for mining operations.

Researchers at the University of Cambridge estimate that bitcoin mining consumes 121.36

terawatt-hours per year, which equates to approximately the annual energy consumption of Argentina.

The energy intensive nature

of bitcoin mining is in some circumstances potentially mitigated by the fact that many miners could elect to operate geographically near

renewable energy sources where energy might be otherwise wasted.

However, miners may be forced to cease operations during an electricity

shortage or power outage, or if electricity prices increase where the mining activities are performed.

This could adversely the price

of bitcoin, or the operation of the Bitcoin network, and accordingly adversely affect the value of the Shares.

In addition, due to concerns around energy consumption

and the impact on public utility companies, various states and cities have implemented, or are considering implementing, moratoriums on

mining activity in their jurisdictions.

A significant reduction in mining activity as a result of such actions could adversely affect

the security of the Bitcoin network by making it easier for a malicious actor or botnet to manipulate the relevant blockchain.

If regulators

or public utilities take action that restricts or otherwise impacts mining activities, such actions could result in decreased security

or activity of the Bitcoin network, consequently adversely impacting the value of the Shares.

The energy intensive nature of bitcoin

mining is in some circumstances potentially mitigated by the fact that many miners could elect to operate geographically near renewable

energy sources where energy might be otherwise wasted.

However, miners may be forced to cease operations during an electricity shortage

or power outage, or if electricity prices increase where the mining activities are performed.

This could adversely the price of bitcoin,

or the operation of the Bitcoin network, and accordingly adversely affect the value of the Shares.

In addition, due to concerns around energy consumption and the impact

on public utility companies, various states and cities have implemented, or are considering implementing, moratoriums on mining activity

in their jurisdictions.

A significant reduction in mining activity as a result of such actions could adversely affect the security of

the Bitcoin network by making it easier for a malicious actor or botnet to manipulate the relevant blockchain.

If regulators or public

utilities take action that restricts or otherwise impacts mining activities, such actions could result in decreased security or activity

of the Bitcoin network, consequently adversely impacting the value of the Shares.

Risk Factors Associated with the Bitcoin Platform Market

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bitcoin held by the Trust and fluctuations in the price of bitcoin could materially and adversely affect an investment in the Shares.

The Shares are designed to mirror as closely as possible

the performance of the price of bitcoin, as determined by the Reference Rate, and the value of the Shares relates directly to the value

of the bitcoin held by the Trust, less the Trust’s liabilities (including estimated accrued but unpaid fees and expenses).

The Reference

Rate is derived from the transaction prices on electronic marketplaces where platform participants may first use fiat currency to trade,

buy and sell bitcoin based on bid-ask trading.

The Shares are designed to mirror as closely as possible the performance

of the price of bitcoin, as determined by the Reference Rate, and the value of the Shares relates directly to the value of the bitcoin

held by the Trust, less the Trust’s liabilities (including estimated accrued but unpaid fees and expenses).

The Reference Rate is

derived from the transaction prices on electronic marketplaces where platform participants may first use fiat currency to trade, buy and

sell bitcoin based on bid-ask trading.

The Reference Rate uses U.S.

dollar-denominated trading data from bitcoin platforms to

determine its value.

Whether a bitcoin platform is considered eligible to be included in the Reference Rate’s calculation depends

on considerations such as depth of liquidity, compliance with applicable legal and regulatory requirements, data availability, domicile

and acceptance of U.S.

dollar-denominated trading data from bitcoin platforms to determine

Whether a bitcoin platform is considered eligible to be included in the Reference Rate’s calculation depends on considerations

such as depth of liquidity, compliance with applicable legal and regulatory requirements, data availability, domicile and acceptance of

dollar deposits.

The price of bitcoin has fluctuated widely over the past several years and may continue to experience

significant price fluctuations.

The price of bitcoin has fluctuated widely over the past several years and may continue to experience significant

price fluctuations.

Several factors may affect the Reference Rate, including, but not limited to:

• Total bitcoin in existence

was approximately 19,800,000 as of December 31, 2024;

• Global bitcoin demand, which

is influenced by the growth of retail merchants’ and commercial businesses’ acceptance of bitcoin as payment for goods and

services, the security of online bitcoin platforms and digital wallets that hold bitcoin, the perception that the use and holding of bitcoin

is safe and secure, the lack of regulatory restrictions on their use and the reputation of bitcoin for illicit use;

• Global bitcoin supply, which

is influenced by similar factors as global bitcoin demand, in addition to fiat currency needs by miners (for example, to invest in equipment

or pay electricity bills) and taxpayers who may liquidate bitcoin holdings around tax deadlines to meet tax obligations;

• Investors’ expectations

with respect to the rate of inflation of fiat currencies;

• Investors’ expectations

with respect to the rate of deflation of bitcoin;

· Total bitcoin in existence was approximately 19,970,000 as of December 31, 2025;

· Global bitcoin demand, which is influenced by the growth of retail merchants’ and commercial businesses’ acceptance of

bitcoin as payment for goods and services, the security of online bitcoin platforms and digital wallets that hold bitcoin, the perception

that the use and holding of bitcoin is safe and secure, the lack of regulatory restrictions on their use and the reputation of bitcoin

for illicit use;

· Global bitcoin supply, which is influenced by similar factors as global bitcoin demand, in addition to fiat currency needs by miners

(for example, to invest in equipment or pay electricity bills) and taxpayers who may liquidate bitcoin holdings around tax deadlines to

meet tax obligations;

· Investors’ expectations with respect to the rate of inflation of fiat currencies;

· Investors’ expectations with respect to the rate of deflation of bitcoin;

· Interest rates;

• Currency exchange rates, including

the rates at which bitcoin may be exchanged for fiat currencies;

• Fiat currency withdrawal and

deposit policies of bitcoin platforms and liquidity of such bitcoin platforms;

• Interruptions in service from

or failures of major bitcoin platforms;

• Cyber theft of bitcoin from

online bitcoin wallet providers, or news of such theft from such providers, or from individuals’ bitcoin wallets;

• Investment and trading activities

of large investors, including private and registered funds, that may directly or indirectly invest in bitcoin;

• Monetary policies of governments,

trade restrictions, currency devaluations and revaluations;

• Regulatory measures, if any,

that restrict the use of bitcoin as a form of payment or the purchase of bitcoin on the bitcoin market;

• The availability and popularity

of businesses that provide bitcoin-related services;

• The maintenance and development

of the open-source software protocol of the Bitcoin network;

• Increased competition from

other forms of cryptocurrency or payments services;

• Global or regional political,

economic or financial events and situations;

• Expectations among Bitcoin

economy participants that the value of bitcoin will soon change;

• Fees associated with processing

a bitcoin transaction.

If bitcoin markets continue to be subject to sharp

fluctuations, you may experience losses if you need to sell your Shares at a time when the price of bitcoin is lower than it was when

you made your prior investment.

Even if you are able to hold Shares for the long-term, your Shares may never generate a profit, since

bitcoin markets have historically experienced extended periods of flat or declining prices, in addition to sharp fluctuations.

In addition, investors should be aware that there

is no assurance that bitcoin will maintain their long-term value in terms of future purchasing power or that the acceptance of bitcoin

payments by mainstream retail merchants and commercial businesses will continue to grow.

In the event that the price of bitcoin declines,

the Sponsor expects the value of an investment in the Shares to decline proportionately.

· Currency exchange rates, including the rates at which bitcoin may be exchanged for fiat currencies;

· Fiat currency withdrawal and deposit policies of bitcoin platforms and liquidity of such bitcoin platforms;

· Interruptions in service from or failures of major bitcoin platforms;

· Cyber theft of bitcoin from online bitcoin wallet providers, or news of such theft from such providers, or from individuals’

bitcoin wallets;

· Investment and trading activities of large investors, including private and registered funds, that may directly or indirectly invest

· Monetary policies of governments, trade restrictions, currency devaluations and revaluations;

· Regulatory measures, if any, that restrict the use of bitcoin as a form of payment or the purchase of bitcoin on the bitcoin market;

· The availability and popularity of businesses that provide bitcoin-related services;

· The maintenance and development of the open-source software protocol of the Bitcoin network;

· Increased competition from other forms of cryptocurrency or payments services;

· Global or regional political, economic or financial events and situations;

· Expectations among Bitcoin economy participants that the value of bitcoin will soon change;

· Fees associated with processing a bitcoin transaction.

If bitcoin markets continue to be subject to sharp fluctuations, you

may experience losses if you need to sell your Shares at a time when the price of bitcoin is lower than it was when you made your prior

Even if you are able to hold Shares for the long-term, your Shares may never generate a profit, since bitcoin markets have

historically experienced extended periods of flat or declining prices, in addition to sharp fluctuations.

In addition, investors should be aware that there is no assurance that

bitcoin will maintain their long-term value in terms of future purchasing power or that the acceptance of bitcoin payments by mainstream

retail merchants and commercial businesses will continue to grow.

In the event that the price of bitcoin declines, the Sponsor expects

the value of an investment in the Shares to decline proportionately.

Due to the unregulated nature and lack of transparency surrounding

the operations of bitcoin platforms, the marketplace may lose confidence in bitcoin platforms, upon which the Trust is dependent.

Bitcoin platforms are relatively new and, in some

cases, not subject to direct regulatory oversight.

Furthermore, while many prominent bitcoin platforms provide the public with significant

information regarding their ownership structure, management teams, corporate practices and regulatory compliance, many bitcoin platforms

do not provide this information.

Bitcoin platforms do not appear to be subject to, or may not comply with, regulation in a similar manner

as other regulated trading platforms, such U.S.

Bitcoin platforms are relatively new and, in some cases, not subject

to direct regulatory oversight.

Furthermore, while many prominent bitcoin platforms provide the public with significant information regarding

their ownership structure, management teams, corporate practices and regulatory compliance, many bitcoin platforms do not provide this

Bitcoin platforms do not appear to be subject to, or may not comply with, regulation in a similar manner as other regulated

trading platforms, such U.S.

securities exchanges.

As a result, the marketplace may lose confidence in bitcoin platforms,

including prominent bitcoin platforms that handle a significant volume of bitcoin trading.

Many digital asset platforms are unlicensed, unregulated,

operate without extensive supervision by governmental authorities, and do not provide the public with significant information regarding

their ownership structure, management team, corporate practices, cybersecurity, and regulatory compliance.

In particular, those located

outside the United States may be subject to significantly less stringent regulatory and compliance requirements in their local jurisdictions.

As a result, trading activity on or reported by these digital asset platforms is generally significantly less regulated than trading in

regulated U.S.

As a result, the marketplace may lose confidence in bitcoin platforms, including prominent

bitcoin platforms that handle a significant volume of bitcoin trading.

Many digital asset platforms are unlicensed, unregulated, operate without

extensive supervision by governmental authorities, and do not provide the public with significant information regarding their ownership

structure, management team, corporate practices, cybersecurity, and regulatory compliance.

In particular, those located outside the United

States may be subject to significantly less stringent regulatory and compliance requirements in their local jurisdictions.

trading activity on or reported by these digital asset platforms is generally significantly less regulated than trading in regulated U.S.

securities and commodities markets, and may reflect behavior that would be prohibited in regulated U.S.

trading venues.

For example, in 2019 there were reports claiming that 80.95% of bitcoin trading volume on bitcoin platforms was false or non-economic

in nature, with specific focus on unregulated bitcoin platforms located outside of the U.S.

Such reports may indicate that the bitcoin

platform market is significantly smaller than expected and that the U.S.

makes up a significantly larger percentage of the bitcoin platform

market than is commonly understood.

Nonetheless, any actual or perceived false trading in the bitcoin platform market, and any other fraudulent

or manipulative acts and practices, could adversely affect the value of bitcoin and/or negatively affect the market perception of Bitcoin.

In addition, over the past several years, some bitcoin

platforms have been closed due to fraud and manipulative activity, business failure or security breaches.

In many of these instances,

the customers of such bitcoin platforms were not compensated or made whole for the partial or complete losses of their account balances

in such bitcoin platforms.

While smaller bitcoin platforms are less likely to have the infrastructure and capitalization that make larger

bitcoin platforms more stable, larger bitcoin platforms are more likely to be appealing targets for hackers and malware and may be more

likely to be targets of regulatory enforcement action.

For example, in

2019 there were reports claiming that 80.95% of bitcoin trading volume on bitcoin platforms was false or non-economic in nature, with

specific focus on unregulated bitcoin platforms located outside of the U.S.

Such reports may indicate that the bitcoin platform market

is significantly smaller than expected and that the U.S.

makes up a significantly larger percentage of the bitcoin platform market than

is commonly understood.

Nonetheless, any actual or perceived false trading in the bitcoin platform market, and any other fraudulent or

manipulative acts and practices, could adversely affect the value of bitcoin and/or negatively affect the market perception of Bitcoin.

In addition, over the past several years, some bitcoin platforms have

been closed due to fraud and manipulative activity, business failure or security breaches.

In many of these instances, the customers of

such bitcoin platforms were not compensated or made whole for the partial or complete losses of their account balances in such bitcoin

While smaller bitcoin platforms are less likely to have the infrastructure and capitalization that make larger bitcoin platforms

more stable, larger bitcoin platforms are more likely to be appealing targets for hackers and malware and may be more likely to be targets

of regulatory enforcement action.

For example, the collapse of Mt.

Gox, which filed for bankruptcy protection in

Japan in late February 2014, demonstrated that even the largest bitcoin platforms could be subject to abrupt failure with consequences

for both users of bitcoin platforms and the Bitcoin industry and market as a whole.

In particular, in the two weeks that followed the

February 7, 2014, halt of bitcoin withdrawals from Mt.

Gox, the value of one bitcoin fell on other bitcoin platforms from around $795

on February 6, 2014 to $578 on February 20, 2014.

Additionally, in January 2015, Bitstamp announced that approximately 19,000 bitcoin

had been stolen from its operational or “hot” wallets.

Further, in August 2016, it was reported that almost 120,000 bitcoins

worth around $78 million were stolen from Bitfinex, a large bitcoin platform.

The value of bitcoin immediately decreased over 10% following

reports of the theft at Bitfinex and the shares suffered a corresponding decrease in value.

In July 2017, FinCEN assessed a $110 million

fine against BTC-E, a now defunct bitcoin platform, for facilitating crimes such as drug sales and ransomware attacks.

In addition, in

December 2017, Yapian, the operator of Seoul-based cryptocurrency platform Youbit, suspended digital asset trading and filed for bankruptcy

following a hack that resulted in a loss of 17% of Yapian’s assets.

Following the hack, Youbit users were allowed to withdraw approximately

75% of the digital assets in their platform accounts, with any potential further distributions to be made following Yapian’s pending

bankruptcy proceedings.

In addition, in January 2018, the Japanese digital asset platform, Coincheck, was hacked, resulting in losses

of approximately $535 million, and in June 2020 the platform suffered another data breach that resulted in the unauthorized access to

its domain registration service, forcing the Japanese platform to halt its crypto remittance service.

In February 2018, the Italian digital

asset platform, Bitgrail, was hacked, resulting in approximately $170 million in losses.

In May 2019, one of the world’s largest

bitcoin platforms, Binance, was hacked, resulting in losses of approximately $40 million.

The Spanish cryptocurrency platform, 2gether,

disclosed in August 2020 that a cyberattack against its platform resulted in $1.45 million in crypto assets-about one-third of the firm’s

holdings at that time-being stolen.

More recently, in November 2022, FTX Trading Ltd.

(“FTX”), one of the largest digital

asset platforms by volume at the time, halted customer withdrawals amid rumors of the company’s liquidity issues and likely insolvency,

which were subsequently corroborated by its CEO.

Shortly thereafter, FTX’s CEO resigned and FTX and many of its affiliates filed

for bankruptcy in the United States, while other affiliates have entered insolvency, liquidation, or similar proceedings around the globe,

following which the U.S.

Department of Justice brought criminal fraud and other charges, and the SEC and CFTC brought civil securities

and commodities fraud charges against certain of FTX’s and its affiliates’ senior executives, including its former CEO (and

the CEO was subsequently convicted by a jury of fraud).

Around the same time, there were reports that approximately $300-600 million of

digital assets were removed from FTX and the full facts remain unknown, including whether such removal was the result of a hack, theft,

insider activity, or other improper behavior.

Negative perception, a lack of stability in the bitcoin

markets and the closure or temporary shutdown of bitcoin platforms due to fraud, business failure, hackers or malware, or government-mandated

regulation may reduce confidence in the Bitcoin network and result in greater volatility in the prices of bitcoin.

Furthermore, the closure

or temporary shutdown of a bitcoin platform used in calculating the Reference Rate may result in a loss of confidence in the Trust’s

ability to determine its bitcoin holdings on a daily basis, although the Benchmark Administrator has documented procedures in place in

its published methodology to mitigate against these situations and continue to calculate and publish the Reference Rate.

These potential

consequences of such a bitcoin platform’s failure could adversely affect the value of the Shares.

Gox, which filed for bankruptcy protection in Japan in late February

2014, demonstrated that even the largest bitcoin platforms could be subject to abrupt failure with consequences for both users of bitcoin

platforms and the Bitcoin industry and market as a whole.

In particular, in the two weeks that followed the February 7, 2014, halt of

bitcoin withdrawals from Mt.

Gox, the value of one bitcoin fell on other bitcoin platforms from around $795 on February 6, 2014 to $578

on February 20, 2014.

Additionally, in January 2015, Bitstamp announced that approximately 19,000 bitcoin had been stolen from its operational

or “hot” wallets.

Further, in August 2016, it was reported that almost 120,000 bitcoins worth around $78 million were stolen

from Bitfinex, a large bitcoin platform.

The value of bitcoin immediately decreased over 10% following reports of the theft at Bitfinex

and the shares suffered a corresponding decrease in value.

In July 2017, FinCEN assessed a $110 million fine against BTC-E, a now defunct

bitcoin platform, for facilitating crimes such as drug sales and ransomware attacks.

In addition, in December 2017, Yapian, the operator

of Seoul-based cryptocurrency platform Youbit, suspended digital asset trading and filed for bankruptcy following a hack that resulted

in a loss of 17% of Yapian’s assets.

Following the hack, Youbit users were allowed to withdraw approximately 75% of the digital

assets in their platform accounts, with any potential further distributions to be made following Yapian’s pending bankruptcy proceedings.

In addition, in January 2018, the Japanese digital asset platform, Coincheck, was hacked, resulting in losses of approximately $535 million,

and in June 2020 the platform suffered another data breach that resulted in the unauthorized access to its domain registration service,

forcing the Japanese platform to halt its crypto remittance service.

In February 2018, the Italian digital asset platform, Bitgrail, was

hacked, resulting in approximately $170 million in losses.

In May 2019, one of the world’s largest bitcoin platforms, Binance, was

hacked, resulting in losses of approximately $40 million.

The Spanish cryptocurrency platform, 2gether, disclosed in August 2020 that

a cyberattack against its platform resulted in $1.45 million in crypto assets-about one-third of the firm’s holdings at that time-being

More recently, in November 2022, FTX, one of the largest digital asset platforms by volume at the time, halted customer withdrawals

amid rumors of the company’s liquidity issues and likely insolvency, which were subsequently corroborated by its CEO.

Shortly thereafter,

FTX’s CEO resigned and FTX and many of its affiliates filed for bankruptcy in the United States, while other affiliates have entered

insolvency, liquidation, or similar proceedings around the globe, following which the U.S.

Department of Justice brought criminal fraud

and other charges, and the SEC and CFTC brought civil securities and commodities fraud charges against certain of FTX’s and its

affiliates’ senior executives, including its former CEO (and the CEO was subsequently convicted by a jury of fraud).

same time, there were reports that approximately $300-600 million of digital assets were removed from FTX and the full facts remain unknown,

including whether such removal was the result of a hack, theft, insider activity, or other improper behavior.

On February 21, 2025, Bybit,

a centralized platform for exchanging digital assets, announced that more than $1.4 billion in ether had been stolen from its platform.

Hackers were able to manipulate Bybit’s transfer process to authorize and complete the illicit transaction.

The incident has resulted

in renewed concerns over the security of digital asset platforms.

Negative perception, a lack of stability in the bitcoin markets and

the closure or temporary shutdown of bitcoin platforms due to fraud, business failure, hackers or malware, or government-mandated regulation

may reduce confidence in the Bitcoin network and result in greater volatility in the prices of bitcoin.

Furthermore, the closure or temporary

shutdown of a bitcoin platform used in calculating the Reference Rate may result in a loss of confidence in the Trust’s ability

to determine its bitcoin holdings on a daily basis, although the Benchmark Administrator has documented procedures in place in its published

methodology to mitigate against these situations and continue to calculate and publish the Reference Rate.

These potential consequences

of such a bitcoin platform’s failure could adversely affect the value of the Shares.

Since there is no limit on the number of bitcoin that the Trust

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of the Shares in a manner unrelated to other factors affecting the global market for bitcoin.

The Trust Agreement places no limit on the number

of bitcoin the Trust may hold.

Moreover, the Trust may issue an unlimited number of Shares, subject to registration requirements, and

therefore acquire an unlimited number of bitcoin in existence at any point in time.

The Bitcoin network’s mathematical protocols

under which bitcoin is created or “mined” permit the creation of a limited, predetermined number of bitcoin not to exceed

Furthermore, the rate of creation or issuance of bitcoin cannot be increased ahead of the protocol’s schedule.

If the number of bitcoin acquired by the Trust is

large enough relative to global bitcoin supply and demand, further creations and redemptions of Shares could have an impact on the supply

of and demand for bitcoin in a manner unrelated to other factors affecting the global market for bitcoin.

Such an impact could affect

the Reference Rate, which would directly affect the price at which Shares are traded on the Exchange or the price of future Baskets created

or redeemed by the Trust.

The Trust Agreement places no limit on the number of bitcoin the Trust

Moreover, the Trust may issue an unlimited number of Shares, subject to registration requirements, and therefore acquire an

unlimited number of bitcoin in existence at any point in time.

The Bitcoin network’s mathematical protocols under which bitcoin

is created or “mined” permit the creation of a limited, predetermined number of bitcoin not to exceed 21 million.

the rate of creation or issuance of bitcoin cannot be increased ahead of the protocol’s schedule.

If the number of bitcoin acquired by the Trust is large enough relative

to global bitcoin supply and demand, further creations and redemptions of Shares could have an impact on the supply of and demand for

bitcoin in a manner unrelated to other factors affecting the global market for bitcoin.

Such an impact could affect the Reference Rate,

which would directly affect the price at which Shares are traded on the Exchange or the price of future Baskets created or redeemed by

The Shares may trade at a discount or premium in the trading

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bitcoin platform market.

The value of a Share may be influenced by non-concurrent

trading hours between the Exchange and various bitcoin platforms, including those that represent components of the Reference Rate.

the Exchange is open for trading in the Shares for a limited period each day, the bitcoin platform market is a 24-hour marketplace;

trading volume and liquidity on the bitcoin platform market is not consistent throughout the day and bitcoin platforms, including the

larger-volume markets, have been known to shut down temporarily or permanently due to security concerns, directed denial of service attacks

and distributed denial-of-service attacks and other reasons.

As a result, during periods when the Exchange is open but large bitcoin platforms

(or a substantial number of smaller bitcoin platforms) are either lightly traded or are closed, trading spreads and the resulting premium

or discount on the Shares may widen and, therefore, increase the difference between the price of the Shares and the Trust’s bitcoin

holdings per Share.

Premiums or discounts may have an adverse effect on an investment in the Shares if a Shareholder sells or acquires

its Shares during a period of discount or premium, respectively.

The value of a Share may be influenced by non-concurrent trading hours

between the Exchange and various bitcoin platforms, including those that represent components of the Reference Rate.

While the Exchange

is open for trading in the Shares for a limited period each day, the bitcoin platform market is a 24-hour marketplace;

however, trading

volume and liquidity on the bitcoin platform market is not consistent throughout the day and bitcoin platforms, including the larger-volume

markets, have been known to shut down temporarily or permanently due to security concerns, directed denial of service attacks and distributed

denial-of-service attacks and other reasons.

As a result, during periods when the Exchange is open but large bitcoin platforms (or a substantial

number of smaller bitcoin platforms) are either lightly traded or are closed, trading spreads and the resulting premium or discount on

the Shares may widen and, therefore, increase the difference between the price of the Shares and the Trust’s bitcoin holdings per

Premiums or discounts may have an adverse effect on an investment in the Shares if a Shareholder sells or acquires its Shares during

a period of discount or premium, respectively.

Investors in Shares in the secondary market may be subject to

brokerage commissions, over which the Trust has no control.

Investors buying or selling Shares in the secondary

market will pay brokerage commissions or other charges imposed by brokers, as determined by the applicable broker.

Brokerage commissions

are often a fixed amount and may be a significant proportional cost for investors seeking to buy or sell relatively small amounts of Shares.

In addition, secondary market investors will also incur the cost of the difference between the price that an investor is willing to buy

shares (the “bid” price) and the price at which an investor is willing to sell Shares (the “ask” price).

difference in bid and ask prices is often referred to as the “spread” or “bid/ask spread.” The bid/ask spread

varies over time for Shares based on trading volume and market liquidity of the Shares and the bitcoin comprising the Trust’s portfolio,

and is generally lower if Shares have more trading volume and market liquidity and higher if Shares have little trading volume and market

Further, a relatively small investor base in the Trust, asset swings in the Trust and/or increased market volatility may cause

bid/ask spreads to increase.

Shares, similar to shares of other issuers listed on a stock exchange, may be sold short and are therefore

subject to the risk of increased volatility associated with short selling.

Due to the costs of buying or selling Shares, including bid/ask

spreads, frequent trading of Shares may significantly reduce investment results and an investment in the Shares may not be advisable for

investors who anticipate regularly making small investments.

Investors buying or selling Shares in the secondary market will pay

brokerage commissions or other charges imposed by brokers, as determined by the applicable broker.

Brokerage commissions are often a fixed

amount and may be a significant proportional cost for investors seeking to buy or sell relatively small amounts of Shares.

secondary market investors will also incur the cost of the difference between the price that an investor is willing to buy shares (the

“bid” price) and the price at which an investor is willing to sell Shares (the “ask” price).

This difference in

bid and ask prices is often referred to as the “spread” or “bid/ask spread.” The bid/ask spread varies over time

for Shares based on trading volume and market liquidity of the Shares and the bitcoin comprising the Trust’s portfolio, and is generally

lower if Shares have more trading volume and market liquidity and higher if Shares have little trading volume and market liquidity.

a relatively small investor base in the Trust, asset swings in the Trust and/or increased market volatility may cause bid/ask spreads

Shares, similar to shares of other issuers listed on a stock exchange, may be sold short and are therefore subject to the

risk of increased volatility associated with short selling.

Due to the costs of buying or selling Shares, including bid/ask spreads, frequent

trading of Shares may significantly reduce investment results and an investment in the Shares may not be advisable for investors who anticipate

regularly making small investments.

If bitcoin prices on the bitcoin platform market move negatively

during hours when the Exchange is closed, trading prices on the Exchange may “gap” down at market open.

The value of a Share may be influenced by non-concurrent

trading hours between the Exchange and various bitcoin platforms, including those that represent components of the Reference Rate.

the Exchange is open for trading in the Shares for a limited period each day, the bitcoin platform market is a 24-hour marketplace.

periods when the Exchange is closed but bitcoin platforms are open, significant changes in the price of bitcoin on the platform market

could result in a difference in performance between the value of bitcoin as measured by the Reference Rate and the most recent bitcoin

holdings per Share or closing trading price.

To the extent that the price of bitcoin on the platform market, and the value of bitcoin

as measured by the Reference Rate, moves significantly in a negative direction after the close of the Exchange, the trading price of the

Shares may “gap” down to the full extent of such negative price shift when the Exchange reopens.

To the extent that the price

of bitcoin on the platform market drops significantly during hours the Exchange is closed, investors may not be able to sell their Shares

until after the “gap” down has been fully realized, resulting in an inability to mitigate losses in a rapidly negative market.

The value of a Share may be influenced by non-concurrent trading hours

between the Exchange and various bitcoin platforms, including those that represent components of the Reference Rate.

While the Exchange

is open for trading in the Shares for a limited period each day, the bitcoin platform market is a 24-hour marketplace.

During periods

when the Exchange is closed but bitcoin platforms are open, significant changes in the price of bitcoin on the platform market could result

in a difference in performance between the value of bitcoin as measured by the Reference Rate and the most recent bitcoin holdings per

Share or closing trading price.

To the extent that the price of bitcoin on the platform market, and the value of bitcoin as measured by

the Reference Rate, moves significantly in a negative direction after the close of the Exchange, the trading price of the Shares may “gap”

down to the full extent of such negative price shift when the Exchange reopens.

To the extent that the price of bitcoin on the platform

market drops significantly during hours the Exchange is closed, investors may not be able to sell their Shares until after the “gap”

down has been fully realized, resulting in an inability to mitigate losses in a rapidly negative market.

A possible “short squeeze” due to a sudden increase

in demand for the Shares that largely exceeds supply may lead to price volatility in the Shares.

Investors may purchase Shares to hedge existing bitcoin

or other digital currencies, commodity or currency exposure or to speculate on the price of bitcoin.

Speculation on the price of bitcoin

may involve long and short exposures.

To the extent that aggregate short exposure exceeds the number of Shares available for purchase

(for example, in the event that large redemption requests by Authorized Participants dramatically affect Share liquidity), investors with

short exposure may have to pay a premium to repurchase Shares for delivery to Share lenders.

Those repurchases may, in turn, dramatically

increase the price of the Shares until additional Shares are created through the creation process.

This is often referred to as a “short

squeeze.” A short squeeze could lead to volatile price movements in the Shares that are not directly correlated to the price of

Investors may purchase Shares to hedge existing bitcoin or other digital

currencies, commodity or currency exposure or to speculate on the price of bitcoin.

Speculation on the price of bitcoin may involve long

and short exposures.

To the extent that aggregate short exposure exceeds the number of Shares available for purchase (for example, in

the event that large redemption requests by Authorized Participants dramatically affect Share liquidity), investors with short exposure

may have to pay a premium to repurchase Shares for delivery to Share lenders.

Those repurchases may, in turn, dramatically increase the

price of the Shares until additional Shares are created through the creation process.

This is often referred to as a “short squeeze.”

A short squeeze could lead to volatile price movements in the Shares that are not directly correlated to the price of bitcoin.

Purchasing activity in the bitcoin platform market associated

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affecting an investment in the Shares.

Purchasing activity associated with acquiring bitcoin

required for deposit with the Trust in connection with the creation of Baskets may increase the market price of bitcoin on the bitcoin

platform market, which will result in higher prices for the Shares.

Increases in the market price of bitcoin may also occur as a result

of the purchasing activity of other market participants.

Other market participants may attempt to benefit from an increase in the market

price of bitcoin that may result from increased purchasing activity of bitcoin connected with the issuance of Baskets.

Consequently, the

market price of bitcoin may decline immediately after Baskets are created.

Selling activity associated with sales of bitcoin

withdrawn from the Trust in connection with the redemption of Baskets may decrease the market price of bitcoin on the bitcoin platform

market, which will result in lower prices for the Shares.

Decreases in the market price of bitcoin may also occur as a result of the selling

Purchasing activity associated with acquiring bitcoin required for

deposit with the Trust in connection with the creation of Baskets may increase the market price of bitcoin on the bitcoin platform market,

which will result in higher prices for the Shares.

Increases in the market price of bitcoin may also occur as a result of the purchasing

activity of other market participants.

Other market participants may attempt to benefit from an increase in the market price of bitcoin

that may result from increased purchasing activity of bitcoin connected with the issuance of Baskets.

Consequently, the market price of

bitcoin may decline immediately after Baskets are created.

Selling activity associated with sales of bitcoin withdrawn from the

Trust in connection with the redemption of Baskets may decrease the market price of bitcoin on the bitcoin platform market, which will

result in lower prices for the Shares.

Decreases in the market price of bitcoin may also occur as a result of the selling activity of

other market participants.

If the Reference Rate declines, the trading price of the Shares will generally also decline.

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from other methods of investing in bitcoin.

The Trust competes with direct investments in bitcoin

and other potential financial vehicles, possibly including securities backed by or linked to bitcoin and digital currency financial vehicles

similar to the Trust.

Market and financial conditions, and other conditions beyond the Sponsor’s control, may make it more attractive

to invest in other financial vehicles or to invest in bitcoin directly, which could limit the market for the Shares and reduce the liquidity

of the Shares.

The Trust competes with direct investments in bitcoin and other potential

financial vehicles, possibly including securities backed by or linked to bitcoin and digital currency financial vehicles similar to the

Market and financial conditions, and other conditions beyond the Sponsor’s control, may make it more attractive to invest

in other financial vehicles or to invest in bitcoin directly, which could limit the market for the Shares and reduce the liquidity of

The Reference Rate may be affected by the sale of other digital

currency financial vehicles that invest in and track the price of bitcoin.

To the extent digital currency financial vehicles

other than the Trust tracking the price of bitcoin are formed and represent a significant proportion of the demand for bitcoin, large

redemptions of the securities of these digital currency financial vehicles, or private funds holding bitcoin, could negatively affect

the Reference Rate, the Trust’s bitcoin holdings and the price of the Shares.

To the extent digital currency financial vehicles other than the Trust

tracking the price of bitcoin are formed and represent a significant proportion of the demand for bitcoin, large redemptions of the securities

of these digital currency financial vehicles, or private funds holding bitcoin, could negatively affect the Reference Rate, the Trust’s

bitcoin holdings and the price of the Shares.

The impact of geopolitical or economic events on the supply and

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and adversely affect an investment in the Shares.

As an alternative to fiat currencies that are backed

by central governments, digital assets such as bitcoin, which are relatively new, are subject to supply and demand forces based upon the

desirability of an alternative, decentralized means of buying and selling goods and services, and it is unclear how such supply and demand

will be impacted by geopolitical events.

Nevertheless, political or economic crises may motivate large-scale acquisitions or sales of

bitcoin either globally or locally.

Large-scale sales of bitcoin would result in a reduction in the Reference Rate and could adversely

affect an investment in the Shares.

As an alternative to fiat currencies that are backed by central governments,

digital assets such as bitcoin, which are relatively new, are subject to supply and demand forces based upon the desirability of an alternative,

decentralized means of buying and selling goods and services, and it is unclear how such supply and demand will be impacted by geopolitical

Nevertheless, political or economic crises may motivate large-scale acquisitions or sales of bitcoin either globally or locally.

Large-scale sales of bitcoin would result in a reduction in the Reference Rate and could adversely affect an investment in the Shares.

Demand for bitcoin is driven, in part, by its perceived status

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impact on the price of bitcoin and adversely affect an investment in the Shares.

Bitcoin was the first digital asset to gain global

adoption and critical mass, and as a result, it has a “first to market” advantage over other digital assets.

As of December

31, 2024, bitcoin was the largest digital asset by market capitalization and had the largest user base and largest combined mining power.

Despite this first to market advantage, as of December 31, 2024, there were over 10,000 alternative digital assets tracked by CoinMarketCap,

having a total market-capitalization of approximately $3.25 trillion (including the approximately $1.834 trillion market cap of bitcoin),

as calculated using market prices and total available supply of each digital asset.

In addition, many consortiums and financial institutions

are also researching and investing resources into private or permissioned blockchain platforms rather than open platforms like the Bitcoin

Competition from the emergence or growth of alternative digital assets could have a negative impact on the demand for, and price

of, bitcoin and thereby adversely affect an investment in the Shares.

Investors may invest in bitcoin through means other

than the Shares, including through direct investments in bitcoin and other potential financial vehicles, possibly including securities

backed by or linked to bitcoin and digital asset financial vehicles similar to the Trust.

Market and financial conditions, and other conditions

beyond the Sponsor’s control, may make it more attractive to invest in other financial vehicles or to invest in bitcoin directly,

which could limit the market for, and reduce the liquidity of, the Shares.

In addition, to the extent digital asset financial vehicles

other than the Trust tracking the price of bitcoin are formed and represent a significant proportion of the demand for bitcoin, large

purchases or redemptions of the securities of these digital asset financial vehicles, or private investment vehicles holding bitcoin,

could negatively affect the Reference Rate, the bitcoin holdings, the price of the Shares, the NAV and the NAV per Share.

Bitcoin was the first digital asset to gain global adoption and critical

mass, and as a result, it has a “first to market” advantage over other digital assets.

As of December 31, 2025, bitcoin was

the largest digital asset by market capitalization and had the largest user base and largest combined mining power.

Despite this first

to market advantage, as of December 31, 2025, there were over 29 million alternative digital assets tracked by CoinMarketCap, having a

total market-capitalization of approximately $2.96 trillion (including the approximately $1.754 trillion market cap of bitcoin), as calculated

using market prices and total available supply of each digital asset.

In addition, many consortiums and financial institutions are also

researching and investing resources into private or permissioned blockchain platforms rather than open platforms like the Bitcoin network.

Competition from the emergence or growth of alternative digital assets could have a negative impact on the demand for, and price of, bitcoin

and thereby adversely affect an investment in the Shares.

Investors may invest in bitcoin through means other than the Shares,

including through direct investments in bitcoin and other potential financial vehicles, possibly including securities backed by or linked

to bitcoin and digital asset financial vehicles similar to the Trust.

Market and financial conditions, and other conditions beyond the

Sponsor’s control, may make it more attractive to invest in other financial vehicles or to invest in bitcoin directly, which could

limit the market for, and reduce the liquidity of, the Shares.

In addition, to the extent digital asset financial vehicles other than

the Trust tracking the price of bitcoin are formed and represent a significant proportion of the demand for bitcoin, large purchases or

redemptions of the securities of these digital asset financial vehicles, or private investment vehicles holding bitcoin, could negatively

affect the Reference Rate, the bitcoin holdings, the price of the Shares, the NAV and the NAV per Share.

Risk Factors Associated with the Reference Rate

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with the price of bitcoin reflected there.

The Reference Rate has a limited history, having

first been introduced on February 28, 2022.

The Reference Rate has a limited history, having first been introduced

on February 28, 2022.

The Reference Rate is also based on the BRR’s methodology, which was introduced November 14, 2016.

The value of both the Reference Rate and the BRR is an average composite reference rate calculated using volume-weighted trading

price data from certain bitcoin platforms (“Constituent Platforms”).

These platforms are chosen by the Benchmark Administrator

in accordance with the provisions of its publicly available CF Constituent Platform Criteria that is available on its website, conformance

to which is supervised by an oversight body (the “Oversight Committee”).

of both the Reference Rate and the BRR is an average composite reference rate calculated using volume-weighted trading price data from

certain bitcoin platforms (“Constituent Platforms”).

These platforms are chosen by the Benchmark Administrator in accordance

with the provisions of its publicly available CF Constituent Platform Criteria that is available on its website, conformance to which

is supervised by an oversight body (the “Oversight Committee”).

This CF Constituent Platform Criteria and the composition

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the Reference Rate will appropriately track the price of bitcoin in the future.

For more information on the Oversight Committee,

the Constituent Platforms, and the CF Constituent Platform Criteria in the Reference Rate, see “The Trust and Bitcoin Prices - The

Reference Rate”.

The value of bitcoin as reflected by the Reference Rate may be

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affect an investment in the Shares.

Momentum pricing typically is associated with growth

stocks and other assets whose valuation, as determined by the investing public, accounts for anticipated future appreciation in value.

The Reference Rate is determined using data from various bitcoin platforms.

The Sponsor believes that momentum pricing of bitcoin has

resulted, and may continue to result, in speculation regarding future appreciation in the value of bitcoin, inflating and making the Reference

Rate more volatile.

As a result, bitcoin may be more likely to fluctuate in value due to changing investor confidence in future appreciation

or depreciation in the Reference Rate, which could adversely affect an investment in the Shares.

Momentum pricing typically is associated with growth stocks and other

assets whose valuation, as determined by the investing public, accounts for anticipated future appreciation in value.

The Reference Rate

is determined using data from various bitcoin platforms.

The Sponsor believes that momentum pricing of bitcoin has resulted, and may continue

to result, in speculation regarding future appreciation in the value of bitcoin, inflating and making the Reference Rate more volatile.

As a result, bitcoin may be more likely to fluctuate in value due to changing investor confidence in future appreciation or depreciation

in the Reference Rate, which could adversely affect an investment in the Shares.

The Benchmark Administrator could experience system failures

If the computers or other facilities of the Benchmark

Administrator, data providers and/or relevant bitcoin trading platforms malfunction for any reason, calculation and dissemination of the

Reference Rate may be delayed and trading in the Shares may be suspended for a period of time.

Errors in Reference Rate data, the Reference

Rate computations and/or construction may occur from time to time and may not be identified and/or corrected for a period of time or at

all, which may have an adverse impact on the Trust and the Shareholders.

Any of the foregoing may lead to the errors in the Reference

Rate, which may lead to a different investment outcome for the Trust and its Shareholders than would have been the case had such events

not occurred.

The Reference Rate is the reference price for calculating

the Trust’s NAV.

Consequently, losses or costs associated with the Reference Rate’s errors or other risks described above

will generally be borne by the Trust and the Shareholders and neither the Sponsor nor its affiliates or agents make any representations

or warranties regarding the foregoing.

If the Reference Rate is not available, the Trust’s holdings may be fair valued in accordance

with the policy approved by the Sponsor.

To the extent the valuation determined in accordance with the policy approved by the Sponsor

differs materially from the actual market price of bitcoin, the price of the Shares may no longer track, whether temporarily or over time,

the price of bitcoin, which could adversely affect an investment in the Trust by reducing investors’ confidence in the Shares’

ability to track the price of bitcoin, which could adversely affect the value of the Shares.

If the computers or other facilities of the Benchmark Administrator,

data providers and/or relevant bitcoin trading platforms malfunction for any reason, calculation and dissemination of the Reference Rate

may be delayed and trading in the Shares may be suspended for a period of time.

Errors in Reference Rate data, the Reference Rate computations

and/or construction may occur from time to time and may not be identified and/or corrected for a period of time or at all, which may have

an adverse impact on the Trust and the Shareholders.

Any of the foregoing may lead to the errors in the Reference Rate, which may lead

to a different investment outcome for the Trust and its Shareholders than would have been the case had such events not occurred.

The Reference Rate is the reference price for calculating the Trust’s

Consequently, losses or costs associated with the Reference Rate’s errors or other risks described above will generally be

borne by the Trust and the Shareholders and neither the Sponsor nor its affiliates or agents make any representations or warranties regarding

the foregoing.

If the Reference Rate is not available, the Trust’s holdings may be fair valued in accordance with the policy approved

by the Sponsor.

To the extent the valuation determined in accordance with the policy approved by the Sponsor differs materially from the

actual market price of bitcoin, the price of the Shares may no longer track, whether temporarily or over time, the price of bitcoin, which

could adversely affect an investment in the Trust by reducing investors’ confidence in the Shares’ ability to track the price

of bitcoin, which could adversely affect the value of the Shares.

The Reference Rate could fail to track the global bitcoin price

Although the Reference Rate is intended to provide

a reasonable measure for the market price of bitcoin, third parties may be able to purchase and sell bitcoin on public or private markets

not included among the bitcoin platforms used in calculating the Reference Rate, and such transactions may take place at prices materially

higher or lower than the Reference Rate.

Moreover, there may be variances in the prices of bitcoin on the various bitcoin platforms used

in calculating the Reference Rate and the price of bitcoins on the bitcoin platforms could be materially higher or lower than the Reference

To the extent the Reference Rate price differs materially from the actual prices available on a bitcoin platform used to calculate

it, or the global market price of bitcoin, the price of the Shares may no longer track, whether temporarily or over time, the global market

Although the Reference Rate is intended to provide a reasonable measure

for the market price of bitcoin, third parties may be able to purchase and sell bitcoin on public or private markets not included among

the bitcoin platforms used in calculating the Reference Rate, and such transactions may take place at prices materially higher or lower

than the Reference Rate.

Moreover, there may be variances in the prices of bitcoin on the various bitcoin platforms used in calculating

the Reference Rate and the price of bitcoins on the bitcoin platforms could be materially higher or lower than the Reference Rate price.

To the extent the Reference Rate price differs materially from the actual prices available on a bitcoin platform used to calculate it,

or the global market price of bitcoin, the price of the Shares may no longer track, whether temporarily or over time, the global market

price of bitcoin, which could adversely affect an investment in the Trust by reducing investors’ confidence in the Shares’

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a different pricing or valuation methodology instead.

The Sponsor, in its sole discretion, may select,

remove, change, or replace the pricing or valuation methodology or policies used to value the Trust’s assets and determine NAV and

NAV per Share, including the Reference Rate.

To the extent such new or revised pricing or valuation methodologies or their pricing output

differ from the Reference Rate, investors may lose confidence in the Shares’ ability to track the market price of bitcoin, which

could adversely affect the value of the Shares.

The Sponsor may make this decision for any reason, including, but not limited to, a determination

that the Reference Rate differs materially from the actual prices available on a bitcoin platform used to calculate it, that errors in

the Reference Rate have negatively impacted the investment outcome for the Trust and its Shareholders, or that third parties are able

to purchase and sell bitcoin on exchanges at prices that are materially higher or lower than those reflected by the Reference Rate.

Sponsor is under no obligation to select a different pricing or valuation method under any circumstance.

If the Sponsor makes the decision

to materially change the valuation methodology or replace of either the Reference Rate or the Benchmark Administrator, the Sponsor will

notify Shareholders via a posting on the Trust’s website, prospectus supplement, post-effective amendment, through a current report

on Form 8-K or in the Trust’s annual or quarterly reports.

The Sponsor, in its sole discretion, may select, remove, change, or

replace the pricing or valuation methodology or policies used to value the Trust’s assets and determine NAV and NAV per Share, including

the Reference Rate.

To the extent such new or revised pricing or valuation methodologies or their pricing output differ from the Reference

Rate, investors may lose confidence in the Shares’ ability to track the market price of bitcoin, which could adversely affect the

value of the Shares.

The Sponsor may make this decision for any reason, including, but not limited to, a determination that the Reference

Rate differs materially from the actual prices available on a bitcoin platform used to calculate it, that errors in the Reference Rate

have negatively impacted the investment outcome for the Trust and its Shareholders, or that third parties are able to purchase and sell

bitcoin on exchanges at prices that are materially higher or lower than those reflected by the Reference Rate.

The Sponsor is under no

obligation to select a different pricing or valuation method under any circumstance.

If the Sponsor makes the decision to materially change

the valuation methodology or replace of either the Reference Rate or the Benchmark Administrator, the Sponsor will notify Shareholders

via a posting on the Trust’s website, prospectus supplement, post-effective amendment, through a current report on Form 8-K or in

the Trust’s annual or quarterly reports.

Risk Factors Associated with Investing in the Trust

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of operating an investment vehicle like the Trust within the United States, their experience may be inadequate or unsuitable to manage

The Sponsor has no meaningful history of past performance

in managing investment vehicles like the Trust within the United States.

The past performances of the Sponsor’s affiliate in other

investment vehicles in other jurisdictions, including their experiences with bitcoin and other commodities, are no indication of the Sponsor’s

The Sponsor has no meaningful history of past performance in managing

investment vehicles like the Trust within the United States.

The past performances of the Sponsor’s affiliate in other investment

vehicles in other jurisdictions, including their experiences with bitcoin and other commodities, are no indication of the Sponsor’s

ability to manage an investment vehicle such as the Trust within the United States.

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in the price of bitcoin.

The Trust is a passive investment vehicle that does

not seek to generate returns beyond tracking the price of bitcoin.

The Trust is a passive investment vehicle that does not seek to generate

returns beyond tracking the price of bitcoin.

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

This means the Sponsor does not speculatively sell bitcoin at times when its price is high or speculatively acquire bitcoin at low prices

in the expectation of future price increases.

It also means the Trust will not utilize leverage, derivatives or any similar arrangements

in seeking to meet its investment objective.

This means the Sponsor

does not speculatively sell bitcoin at times when its price is high or speculatively acquire bitcoin at low prices in the expectation

of future price increases.

It also means the Trust will not utilize leverage, derivatives or any similar arrangements in seeking to meet

its investment objective.

Any losses sustained by the Trust will adversely affect the value of your Shares.

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unrelated to the value of bitcoin.

The value of the Shares may be influenced by a variety

of factors unrelated to the price of bitcoin that may have an adverse effect on the price of the Shares.

These factors include the following

• Unanticipated problems or issues

with respect to the mechanics of the Trust’s operations and the trading of the Shares may arise, in particular due to the fact that

the mechanisms and procedures governing the creation and redemption of Baskets in exchange for cash, offering of the Shares and storage

of bitcoin have been developed specifically for this product;

• The Trust could experience

difficulties in operating and maintaining its technical infrastructure, including in connection with expansions or updates to such infrastructure,

which are likely to be complex and could lead to unanticipated delays, unforeseen expenses and security vulnerabilities;

• The Trust could experience

unforeseen issues relating to the performance and effectiveness of the security procedures used to protect the Trust’s account with

the Bitcoin Custodian, or the security procedures may not protect against all errors, software flaws or other vulnerabilities in the Trust’s

technical infrastructure, which could result in theft, loss or damage of its assets;

• Service providers may fail

to perform their obligations or decide to terminate their relationships with the Trust due to concerns that the introduction of privacy

enhancing features to the Bitcoin network may increase the potential for bitcoin to be used to facilitate crime, exposing such service

providers to potential reputational harm.

Any of these factors could affect the value of the Shares, either directly or indirectly through

their effect on the Trust’s assets;

• Prime Execution Agent could

experience difficulties from business failures, bankruptcies, hacking, fraud, crime, government investigations, or other negative developments

affecting digital asset businesses, including digital asset platforms, or banks or other financial institutions and service providers

which provide services to the digital assets industry.

The value of the Shares may be influenced by a variety of factors unrelated

to the price of bitcoin that may have an adverse effect on the price of the Shares.

These factors include the following factors:

· Unanticipated problems or issues with respect to the mechanics of the Trust’s operations and the trading of the Shares may arise,

in particular due to the fact that the mechanisms and procedures governing the creation and redemption of Baskets in exchange for cash,

offering of the Shares and storage of bitcoin have been developed specifically for this product;

· The Trust could experience difficulties in operating and maintaining its technical infrastructure, including in connection with expansions

or updates to such infrastructure, which are likely to be complex and could lead to unanticipated delays, unforeseen expenses and security

vulnerabilities;

· The Trust could experience unforeseen issues relating to the performance and effectiveness of the security procedures used to protect

the Trust’s account with the Bitcoin Custodian, or the security procedures may not protect against all errors, software flaws or

other vulnerabilities in the Trust’s technical infrastructure, which could result in theft, loss or damage of its assets;

· Service providers may fail to perform their obligations or decide to terminate their relationships with the Trust due to concerns

that the introduction of privacy enhancing features to the Bitcoin network may increase the potential for bitcoin to be used to facilitate

crime, exposing such service providers to potential reputational harm.

Any of these factors could affect the value of the Shares, either

directly or indirectly through their effect on the Trust’s assets;

· Prime Execution Agent could experience difficulties from business failures, bankruptcies, hacking, fraud, crime, government investigations,

or other negative developments affecting digital asset businesses, including digital asset platforms, or banks or other financial institutions

and service providers which provide services to the digital assets industry.

The Shares are a relatively new securities product.

The mechanisms and procedures governing the creation,

redemption and offering of the Shares are recently developed securities products.

Consequently, there may be unanticipated problems or

issues with respect to the mechanics of the operations and the trading of the Shares that could have a material adverse effect on an investment

in the Shares.

The mechanisms and procedures governing the creation, redemption and

offering of the Shares are recently developed securities products.

Consequently, there may be unanticipated problems or issues with respect

to the mechanics of the operations and the trading of the Shares that could have a material adverse effect on an investment in the Shares.

The Trust is subject to market risk.

Market risk refers to the risk that the market price

of bitcoin held by the Trust will rise or fall, sometimes rapidly or unpredictably.

An investment in the Shares is subject to market risk,

including the possible loss of the entire principal of the investment.

Market risk refers to the risk that the market price of bitcoin held

by the Trust will rise or fall, sometimes rapidly or unpredictably.

An investment in the Shares is subject to market risk, including the

possible loss of the entire principal of the investment.

Investors should not rely on past performance in deciding whether

to buy Shares.

Investors should not rely on the past performance

of the Trust, the Reference Rate or bitcoin in deciding whether to buy Shares in the Fund.

Investors should not rely on the past performance of the Trust, the

Reference Rate or bitcoin in deciding whether to buy Shares in the Fund.

The NAV may not always correspond to the market price of bitcoin

and, as a result, Baskets may be created or redeemed at a value that is different from the market price of the Shares.

The NAV of the Trust will change as fluctuations

occur in the market price of the Trust’s bitcoin holdings.

Shareholders should be aware that the public trading price per Share

may be different from the NAV for a number of reasons, including price volatility, trading activity, the closing of bitcoin platforms

due to fraud, failure, security breaches or otherwise, and the fact that supply and demand forces at work in the secondary trading market

for Shares are related, but not identical, to the supply and demand forces influencing the market price of bitcoin.

An Authorized Participant may be able to create or

redeem a Basket at a discount or a premium to the public trading price per Share and the Trust will therefore maintain its intended fractional

exposure to a specific amount of bitcoin per Share.

Shareholders also should note that the size of the

Trust in terms of total bitcoin held may change substantially over time and as Baskets are created and redeemed.

The NAV of the Trust will change as fluctuations occur in the market

price of the Trust’s bitcoin holdings.

Shareholders should be aware that the public trading price per Share may be different from

the NAV for a number of reasons, including price volatility, trading activity, the closing of bitcoin platforms due to fraud, failure,

security breaches or otherwise, and the fact that supply and demand forces at work in the secondary trading market for Shares are related,

but not identical, to the supply and demand forces influencing the market price of bitcoin.

An Authorized Participant may be able to create or redeem a Basket

at a discount or a premium to the public trading price per Share and the Trust will therefore maintain its intended fractional exposure

to a specific amount of bitcoin per Share.

Shareholders also should note that the size of the Trust in terms of

total bitcoin held may change substantially over time and as Baskets are created and redeemed.

Authorized Participants’ buying and selling activity associated

with the creation and redemption of Baskets may adversely affect an investment in the Shares of the Trust.

Authorized Participants’ purchase of bitcoin

in connection with Basket creation orders may cause the price of bitcoin to increase, which will result in higher prices for the Shares.

Increases in the bitcoin prices may also occur as a result of bitcoin purchases by other market participants who attempt to benefit from

an increase in the market price of bitcoin when Baskets are created.

The market price of bitcoin may therefore decline immediately after

Baskets are created.

Selling activity associated with sales of bitcoin

by Authorized Participants in connection with redemption orders may decrease the bitcoin prices, which will result in lower prices for

Decreases in bitcoin prices may also occur as a result of selling activity by other market participants.

In addition to the effect that purchases and sales

of bitcoin by Authorized Participants may have on the price of bitcoin, sales and purchases of bitcoin by similar investment vehicles

(if developed) could impact the price of bitcoin.

If the price of bitcoin declines, the trading price of the Shares will generally also

Authorized Participants’ purchase of bitcoin in connection with

Basket creation orders may cause the price of bitcoin to increase, which will result in higher prices for the Shares.

Increases in the

bitcoin prices may also occur as a result of bitcoin purchases by other market participants who attempt to benefit from an increase in

the market price of bitcoin when Baskets are created.

The market price of bitcoin may therefore decline immediately after Baskets are

Selling activity associated with sales of bitcoin by Authorized Participants

in connection with redemption orders may decrease the bitcoin prices, which will result in lower prices for the Shares.

Decreases in bitcoin

prices may also occur as a result of selling activity by other market participants.

In addition to the effect that purchases and sales of bitcoin by Authorized

Participants may have on the price of bitcoin, sales and purchases of bitcoin by similar investment vehicles (if developed) could impact

the price of bitcoin.

If the price of bitcoin declines, the trading price of the Shares will generally also decline.

The inability of Authorized Participants and market makers to

hedge their bitcoin exposure may adversely affect the liquidity of Shares and the value of an investment in the Shares.

Authorized Participants and market makers will generally

want to hedge their exposure in connection with Basket creation and redemption orders.

To the extent Authorized Participants and market

makers are unable to hedge their exposure due to market conditions ( e.g.

, insufficient bitcoin liquidity in the market, inability

to locate an appropriate hedge counterparty, etc.), such conditions may make it difficult to create or redeem Baskets or cause them to

not create or redeem Baskets.

In addition, the hedging mechanisms employed by Authorized Participants and market makers to hedge their

exposure to bitcoin may not function as intended, which may make it more difficult for them to enter into such transactions.

could negatively impact the market price of the Trust and the spread at which the Trust trades on the open market.

The market for exchange-traded

bitcoin futures has limited trading history and operational experience and may be less liquid, more volatile and more vulnerable to economic,

market and industry changes than more established futures markets.

The liquidity of the market will depend on, among other things, the

adoption of bitcoin and the commercial and speculative interest in the market for the ability to hedge against the price of bitcoin with

exchange-traded bitcoin futures.

The arbitrage mechanism on which the Trust relies

to keep the price of the Shares closely linked to the price of bitcoin, as reflected via the Reference Rate, may not function properly

if Authorized Participants are able to purchase or sell large aggregations of bitcoins in the open market at prices that are materially

Authorized Participants and market makers will generally want to hedge

their exposure in connection with Basket creation and redemption orders.

To the extent Authorized Participants and market makers are unable

to hedge their exposure due to market conditions ( e.g.

, insufficient bitcoin liquidity in the market, inability to locate an appropriate

hedge counterparty, etc.), such conditions may make it difficult to create or redeem Baskets or cause them to not create or redeem Baskets.

In addition, the hedging mechanisms employed by Authorized Participants and market makers to hedge their exposure to bitcoin may not function

as intended, which may make it more difficult for them to enter into such transactions.

Such events could negatively impact the market

price of the Trust and the spread at which the Trust trades on the open market.

The market for exchange-traded bitcoin futures has limited

trading history and operational experience and may be less liquid, more volatile and more vulnerable to economic, market and industry

changes than more established futures markets.

The liquidity of the market will depend on, among other things, the adoption of bitcoin

and the commercial and speculative interest in the market for the ability to hedge against the price of bitcoin with exchange-traded bitcoin

The arbitrage mechanism on which the Trust relies to keep the price

of the Shares closely linked to the price of bitcoin, as reflected via the Reference Rate, may not function properly if Authorized Participants

are able to purchase or sell large aggregations of bitcoins in the open market at prices that are materially higher or lower than the

Reference Rate.

Authorized Participants may purchase or sell bitcoins on public or private markets not included among the Bitcoin platforms

included in the Reference Rate, and such transactions may take place at prices materially higher or lower than the Reference Rate.

while the Reference Rate provides a U.S.

dollar-denominated composite reference rate for the price of bitcoin based on the volume-weighted

price of a bitcoin on certain constituent Bitcoin platforms at any given time, the prices on each individual Bitcoin platform are not

necessarily equal to the value of a bitcoin as represented by the Reference Rate.

The price of bitcoins on an individual bitcoin platform could be materially

higher or lower than the Reference Rate.

Authorized Participants may purchase or sell bitcoins on public or private markets not included

among the Bitcoin platforms included in the Reference Rate, and such transactions may take place at prices materially higher or lower

than the Reference Rate.

Furthermore, while the Reference Rate provides a U.S.

dollar-denominated composite reference rate for the price

of bitcoin based on the volume-weighted price of a bitcoin on certain constituent Bitcoin platforms at any given time, the prices on each

individual Bitcoin platform are not necessarily equal to the value of a bitcoin as represented by the Reference Rate.

The price of bitcoins on an individual bitcoin platform

could be materially higher or lower than the Reference Rate.

Under either such circumstance, the arbitrage mechanism will function to

link the price of the Shares to the prices at which Authorized Participants are able to purchase or sell large aggregations of bitcoins.

To the extent such prices differ materially from the Reference Rate, the price of the Shares may no longer track, whether temporarily

or over time, the Reference Rate, which could adversely affect an investment in the Trust by reducing investors’ confidence in the

Shares’ ability to track the market price of bitcoin.

Under either such circumstance, the arbitrage mechanism will function to link the price of the

Shares to the prices at which Authorized Participants are able to purchase or sell large aggregations of bitcoins.

To the extent such

prices differ materially from the Reference Rate, the price of the Shares may no longer track, whether temporarily or over time, the Reference

Rate, which could adversely affect an investment in the Trust by reducing investors’ confidence in the Shares’ ability to

track the market price of bitcoin.

Arbitrage transactions intended to keep the price of Shares closely

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if Authorized Participants or market makers encounter difficulties, which may adversely affect an investment in the Shares.

If the processes of creation and redemption of Baskets

(which depend on timely transfers of bitcoin to and by the Bitcoin Custodian and/or Prime Execution Agent) encounter any unanticipated

difficulties, including, but not limited to, the price volatility of bitcoin, the insolvency, business failure or interruption, default,

failure to perform, security breach, or other problems affecting the Prime Execution Agent or Bitcoin Custodian, limiting creations and

redemptions to cash, the closing of bitcoin trading platforms due to fraud, failures, regulatory or legislative action, security breaches

or otherwise, or network outages or congestion, spikes in fees demanded by miners, or other problems or disruptions affecting the Bitcoin

network, the Trust’s inability in the future to obtain regulatory approvals for the offer and sale of additional Shares after the

present offering is completed, potential market participants who would otherwise be willing to purchase or redeem Baskets to take advantage

of any arbitrage opportunity arising from discrepancies between the price of the Shares and the price of the underlying bitcoin may not

take the risk that, as a result of those difficulties, they may not be able to realize the profit they expect.

In addition, in the case

of a network outage or other problems affecting the Bitcoin network, the processing of transactions on the Bitcoin network may be disrupted,

which in turn may prevent Authorized Participants (or market makers via Authorized Participants) from transacting in bitcoin and/or purchasing

or redeeming Baskets.

In such situations, the liquidity of Shares may decline and the price of the Shares may fluctuate independently

of the price of bitcoin and may fall.

If the processes of creation and redemption of Baskets (which depend

on timely transfers of bitcoin to and by the Bitcoin Custodian and/or Prime Execution Agent) encounter any unanticipated difficulties,

including, but not limited to, the price volatility of bitcoin, the insolvency, business failure or interruption, default, failure to

perform, security breach, or other problems affecting the Prime Execution Agent or Bitcoin Custodian, limiting creations and redemptions

to cash, the closing of bitcoin trading platforms due to fraud, failures, regulatory or legislative action, security breaches or otherwise,

or network outages or congestion, spikes in fees demanded by miners, or other problems or disruptions affecting the Bitcoin network, the

Trust’s inability in the future to obtain regulatory approvals for the offer and sale of additional Shares after the present offering

is completed, potential market participants who would otherwise be willing to purchase or redeem Baskets to take advantage of any arbitrage

opportunity arising from discrepancies between the price of the Shares and the price of the underlying bitcoin may not take the risk that,

as a result of those difficulties, they may not be able to realize the profit they expect.

In addition, in the case of a network outage

or other problems affecting the Bitcoin network, the processing of transactions on the Bitcoin network may be disrupted, which in turn

may prevent Authorized Participants (or market makers via Authorized Participants) from transacting in bitcoin and/or purchasing or redeeming

In such situations, the liquidity of Shares may decline and the price of the Shares may fluctuate independently of the price

of bitcoin and may fall.

The use of cash creations and redemptions, as opposed to in-kind

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Shares closely linked to the price of bitcoin and, as a result, the price of the Shares may fall or otherwise diverge from NAV.

The use of cash creations and redemptions, as opposed

to in-kind creations and redemptions, could cause delays in trade execution due to potential operational issues arising from implementing

a cash creation and redemption model, which involves greater operational steps (and therefore execution risk) than the originally contemplated

in-kind creation and redemption model, or the potential unavailability or exhaustion of the Trust’s ability to borrow bitcoin or

cash as trade credits (“Trade Credits”), which the Trust would not be able to use in connection with in-kind creations and

Such delays could cause the execution price associated with such trades to materially deviate from the Reference Rate used

to determine the NAV, particularly when considering that the trading prices for bitcoin have exhibited high levels of volatility and may

continue to do so.

Even though the Authorized Participant is responsible for the dollar cost of such difference in prices, Authorized

Participants could default on their obligations to the Trust, or such potential risks and costs could lead to Authorized Participants,

who would otherwise be willing to purchase or redeem Baskets to take advantage of any arbitrage opportunity arising from discrepancies

between the price of the Shares and the price of the underlying bitcoin, to elect to not participate in the Trust’s Share creation

and redemption processes.

This may adversely affect the arbitrage mechanism intended to keep the price of the Shares closely linked to

the price of bitcoin, and as a result, the price of the Shares may fall or otherwise diverge from NAV.

If the arbitrage mechanism is not

effective, purchases or sales of Shares on the secondary market could occur at a premium or discount to NAV, which could harm Shareholders

by causing them buy Shares at a price higher than the value of the underlying bitcoin held by the Trust or sell Shares at a price lower

than the value of the underlying bitcoin held by the Trust, causing Shareholders to suffer losses.

The use of cash creations and redemptions, as opposed to in-kind creations

and redemptions, could cause delays in trade execution due to potential operational issues arising from implementing a cash creation and

redemption model, which involves greater operational steps (and therefore execution risk), or the potential unavailability or exhaustion

of the Trust’s ability to borrow bitcoin or cash as trade credits (“Trade Credits”), which the Trust would not be able

to use in connection with in-kind creations and redemptions.

Such delays could cause the execution price associated with such trades to

materially deviate from the Reference Rate used to determine the NAV, particularly when considering that the trading prices for bitcoin

have exhibited high levels of volatility and may continue to do so.

Even though the Authorized Participant is responsible for the dollar

cost of such difference in prices, Authorized Participants could default on their obligations to the Trust, or such potential risks and

costs could lead to Authorized Participants, who would otherwise be willing to purchase or redeem Baskets to take advantage of any arbitrage

opportunity arising from discrepancies between the price of the Shares and the price of the underlying bitcoin, to elect to not participate

in the Trust’s Share creation and redemption processes.

This may adversely affect the arbitrage mechanism intended to keep the price

of the Shares closely linked to the price of bitcoin, and as a result, the price of the Shares may fall or otherwise diverge from NAV.

If the arbitrage mechanism is not effective, purchases or sales of Shares on the secondary market could occur at a premium or discount

to NAV, which could harm Shareholders by causing them buy Shares at a price higher than the value of the underlying bitcoin held by the

Trust or sell Shares at a price lower than the value of the underlying bitcoin held by the Trust, causing Shareholders to suffer losses.

The Trust is subject to risks due to its concentration of investments

in a single asset class.

Unlike other funds that may invest in diversified

assets, the Trust’s investment strategy is concentrated in a single asset class:

This concentration maximizes the degree

of the Trust’s exposure to a variety of market risks associated with bitcoin.

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 and will not be offset by other gains if the Trust were to invest in underlying assets that were diversified.

Unlike other funds that may invest in diversified assets, the Trust’s

investment strategy is concentrated in a single asset class:

This concentration maximizes the degree of the Trust’s exposure

to a variety of market risks associated with bitcoin.

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 and will not be offset

by other gains if the Trust were to invest in underlying assets that were diversified.

The lack of full insurance and Shareholders’ limited rights

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expose the Trust and its Shareholders to the risk of loss of the Trust’s bitcoins for which no person or entity is liable.

The Trust is not a banking institution or otherwise

a member of the Federal Deposit Insurance Corporation (“FDIC”) or Securities Investor Protection Corporation (“SIPC”)

and, therefore, deposits held with or assets held by the Trust are not subject to the protections enjoyed by depositors with FDIC or SIPC

member institutions.

The Trust is not a banking institution or otherwise a member of the

Federal Deposit Insurance Corporation (“FDIC”) or Securities Investor Protection Corporation (“SIPC”) and, therefore,

deposits held with or assets held by the Trust are not subject to the protections enjoyed by depositors with FDIC or SIPC member institutions.

In addition, neither the Trust nor the Sponsor insure the Trust’s bitcoins.

While the Bitcoin Custodian has

advised the Sponsor that it has insurance coverage up to a certain amount that could be used to repay losses of the digital assets it

custodies on behalf of its clients, including the Trust’s bitcoin, resulting from theft, Shareholders cannot be assured that the

Bitcoin Custodian will maintain adequate insurance, that such coverage will cover losses with respect to the Trust’s bitcoins, or

that sufficient insurance proceeds will be available to cover the Trust’s losses in full.

The Bitcoin Custodian’s insurance

may not cover the type of losses experienced by the Trust.

Alternatively, the Trust may be forced to share such insurance proceeds with

other clients or customers of the Bitcoin Custodian, which could reduce the amount of such proceeds that are available to the Trust.

addition, the bitcoin insurance market is limited, and the level of insurance maintained by the Bitcoin Custodian may be substantially

lower than the assets of the Trust.

While the Bitcoin Custodian maintains certain capital reserve requirements depending on the assets

under custody, and such capital reserves may provide additional means to cover client asset losses, the Trust cannot be assured that the

Bitcoin Custodian will maintain capital reserves sufficient to cover actual or potential losses with respect to the Trust’s digital

Furthermore, under the Custodian Agreement and the

Prime Execution Agent Agreement, the Bitcoin Custodian’s liability and the Prime Execution Agent’s liability is limited in

various ways.

By way of example, the Bitcoin Custodian is not liable for delays, suspension of operations, failure in performance, or

interruption of service to the extent it is directly due to a cause or condition beyond the reasonable control of the Bitcoin Custodian.

In the event of potential losses incurred by the Trust as a result of the Bitcoin Custodian losing control of the Trust’s bitcoins

or failing to properly execute instructions on behalf of the Trust, the Bitcoin Custodian’s liability with respect to the Trust

will be subject to certain limitations which may allow it to avoid liability for potential losses or may be insufficient to cover the

value of such potential losses.

Furthermore, the insurance maintained by the Bitcoin Custodian may be insufficient to cover its liabilities

to the Trust.

Both the Trust and the Bitcoin Custodian are required to indemnify each other under certain circumstances.

Bitcoin Custodian carries insurance for the benefit of its account holders, the Bitcoin Custodian’s insurance does not cover any

loss in value to bitcoin and only covers losses caused by certain events such as fraud or theft and, in such covered events, it is unlikely

the insurance would cover the full amount of any losses incurred by the Trust.

The Bitcoin Custodian maintains a commercial crime insurance

policy, which is intended to cover the loss of client assets held in cold storage, including from employee collusion or fraud, physical

loss including theft, damage of key material, security breach or hack, and fraudulent transfer.

The insurance maintained by the Bitcoin

Custodian is shared among all of the Bitcoin Custodian’s customers, is not specific to the Trust or to customers holding bitcoin

with the Bitcoin Custodian, and may not be available or sufficient to protect the Trust from all possible losses or sources of losses.

Moreover, in the event of an insolvency or bankruptcy

of the Prime Execution Agent or Bitcoin Custodian in the future, given that the contractual protections and legal rights of customers

with respect to digital assets held on their behalf by third parties are relatively untested in a bankruptcy of an entity such as the

Prime Execution Agent or Bitcoin Custodian in the virtual currency industry, there is a risk that customers’ assets - including

the Trust’s assets - may be considered the property of the bankruptcy estate of the Bitcoin Custodian, and customers - including

the Trust - may be at risk of being treated as general unsecured creditors of such entities and subject to the risk of total loss or markdowns

on value of such assets.

The Custody Agreement contains an agreement by the

parties to treat the bitcoin credited to the Trust’s Vault Balance as financial assets under Article 8 of the New York Uniform Commercial

Code (“Article 8”), in addition to stating that the Bitcoin Custodian will serve as fiduciary and custodian on the Trust’s

It is possible that a court would not treat custodied digital assets as part of the Bitcoin Custodian’s general estate in

the event the Bitcoin Custodian were to experience insolvency.

However, due to the novelty of digital asset custodial arrangements courts

have not yet considered this type of treatment for custodied digital assets and it is not possible to predict with certainty how they

would rule in such a scenario.

If the Bitcoin Custodian became subject to insolvency proceedings and a court were to rule that the custodied

bitcoin were part of the Bitcoin Custodian’s general estate and not the property of the Trust, then the Trust would be treated as

a general unsecured creditor in the Bitcoin Custodian’s insolvency proceedings and the Trust could be subject to the loss of all

or a significant portion of its assets.

Moreover, in the event of the bankruptcy of the Bitcoin Custodian, an automatic stay could go

into effect and protracted litigation could be required in order to recover the assets held with the Bitcoin Custodian, all of which could

significantly and negatively impact the Trust’s operations and the value of the Shares.

With respect to the Prime Execution Agent Agreement,

there is a risk that the Trading Balance, in which the Trust’s bitcoin and cash is held in omnibus accounts by the Prime Execution

Agent could be considered part of the Prime Execution Agent’s bankruptcy estate in the event of the Prime Execution Agent’s

The Prime Execution Agent Agreement contains an Article 8 opt-in clause with respect to the Trust’s assets held in the

Trading Balance.

The Prime Execution Agent is not required to hold any of the bitcoin or cash in the Trust’s Trading Balance in

Within the Trading Balance, the Prime Execution Agent Agreement provides that the Trust does not have an identifiable claim

to any particular bitcoin (and cash).

Instead, the Trust’s Trading Balance represents an entitlement to a pro rata share of the

bitcoin (and cash) the Prime Execution Agent has allocated to the omnibus wallets the Prime Execution Agent holds, as well as the accounts

in the Prime Execution Agent’s name that the Prime Execution Agent maintains at a connected trading venue (each, a “Connected

Trading Venue”) (which are typically held on an omnibus, rather than segregated, basis).

If the Prime Execution Agent suffers an

insolvency event, there is a risk that the Trust’s assets held in the Trading Balance could be considered part of the Prime Execution

Agent’s bankruptcy estate and the Trust could be treated as a general unsecured creditor of the Prime Execution Agent, which could

result in losses for the Trust and Shareholders.

Moreover, in the event of the bankruptcy of the Prime Execution Agent, an automatic stay

could go into effect and protracted litigation could be required in order to recover the assets held with the Prime Execution Agent, all

of which could significantly and negatively impact the Trust’s operations and the value of the Shares.

There are no policies that

would limit the amount of bitcoin that can be held temporarily in the Trading Balance maintained by the Prime Execution Agent.

Under the Trust Agreement, the Trustee and the Sponsor

will not be liable for any liability or expense incurred, including, without limitation, as a result of any loss of bitcoin by the Bitcoin

Custodian, absent fraud, bad faith, or willful misconduct on the part of the Sponsor or the Trustee, as the case may be.

the recourse of the Trust or the Shareholders to the Trustee or the Sponsor, including in the event of a loss of bitcoin by the Bitcoin

Custodian, is limited.

The Shareholders’ recourse against the Sponsor,

the Trustee, and the Trust’s other service providers for the services they provide to the Trust, including, without limitation,

those relating to the holding of bitcoin or the provision of instructions relating to the movement of bitcoin, is limited.

For the avoidance

of doubt, neither the Sponsor, the Trustee, nor any of their affiliates, nor any other party has guaranteed the assets or liabilities,

or otherwise assumed the liabilities, of the Trust, or the obligations or liabilities of any service provider to the Trust, including,

without limitation, the Bitcoin Custodian and Prime Execution Agent.

The Prime Execution Agent Agreement and Custodian Agreement provide

that neither the Sponsor, the Trustee, nor their affiliates shall have any obligation of any kind or nature whatsoever, by guaranty, enforcement

or otherwise, with respect to the performance of any the Trust’s obligations, agreements, representations or warranties under the

Prime Execution Agent Agreement or Custodian Agreement or any transaction thereunder.

Consequently, a loss may be suffered with respect

to the Trust’s bitcoin that is not covered by the Bitcoin Custodian’s insurance and for which no person is liability in damages.

As a result, the recourse of the Trust or the Shareholders, under applicable law, is limited.

While the Bitcoin Custodian has advised the Sponsor

that it has insurance coverage up to a certain amount that could be used to repay losses of the digital assets it custodies on behalf

of its clients, including the Trust’s bitcoin, resulting from theft, Shareholders cannot be assured that the Bitcoin Custodian will

maintain adequate insurance, that such coverage will cover losses with respect to the Trust’s bitcoins, or that sufficient insurance

proceeds will be available to cover the Trust’s losses in full.

The Bitcoin Custodian’s insurance may not cover the type of

losses experienced by the Trust.

Alternatively, the Trust may be forced to share such insurance proceeds with other clients or customers

of the Bitcoin Custodian, which could reduce the amount of such proceeds that are available to the Trust.

In addition, the bitcoin insurance

market is limited, and the level of insurance maintained by the Bitcoin Custodian may be substantially lower than the assets of the Trust.

While the Bitcoin Custodian maintains certain capital reserve requirements depending on the assets under custody, and such capital reserves

may provide additional means to cover client asset losses, the Trust cannot be assured that the Bitcoin Custodian will maintain capital

reserves sufficient to cover actual or potential losses with respect to the Trust’s digital assets.

Furthermore, under the Custodian Agreement and the Prime Execution

Agent Agreement, the Bitcoin Custodian’s liability and the Prime Execution Agent’s liability is limited in various ways.

way of example, the Bitcoin Custodian is not liable for delays, suspension of operations, failure in performance, or interruption of service

to the extent it is directly due to a cause or condition beyond the reasonable control of the Bitcoin Custodian.

In the event of potential

losses incurred by the Trust as a result of the Bitcoin Custodian losing control of the Trust’s bitcoins or failing to properly

execute instructions on behalf of the Trust, the Bitcoin Custodian’s liability with respect to the Trust will be subject to certain

limitations which may allow it to avoid liability for potential losses or may be insufficient to cover the value of such potential losses.

Furthermore, the insurance maintained by the Bitcoin Custodian may be insufficient to cover its liabilities to the Trust.

Both the Trust

and the Bitcoin Custodian are required to indemnify each other under certain circumstances.

Although the Bitcoin Custodian carries insurance

for the benefit of its account holders, the Bitcoin Custodian’s insurance does not cover any loss in value to bitcoin and only covers

losses caused by certain events such as fraud or theft and, in such covered events, it is unlikely the insurance would cover the full

amount of any losses incurred by the Trust.

The Bitcoin Custodian maintains a commercial crime insurance policy, which is intended to

cover the loss of client assets held in cold storage, including from employee collusion or fraud, physical loss including theft, damage

of key material, security breach or hack, and fraudulent transfer.

The insurance maintained by the Bitcoin Custodian is shared among all

of the Bitcoin Custodian’s customers, is not specific to the Trust or to customers holding bitcoin with the Bitcoin Custodian, and

may not be available or sufficient to protect the Trust from all possible losses or sources of losses.

Moreover, in the event of an insolvency or bankruptcy of the Prime

Execution Agent or Bitcoin Custodian in the future, given that the contractual protections and legal rights of customers with respect

to digital assets held on their behalf by third parties are relatively untested in a bankruptcy of an entity such as the Prime Execution

Agent or Bitcoin Custodian in the virtual currency industry, there is a risk that customers’ assets - including the Trust’s

assets - may be considered the property of the bankruptcy estate of the Bitcoin Custodian, and customers - including the Trust - may be

at risk of being treated as general unsecured creditors of such entities and subject to the risk of total loss or markdowns on value of

The Custody Agreement contains an agreement by the parties to treat

the bitcoin credited to the Trust’s Vault Balance as financial assets under Article 8 of the New York Uniform Commercial Code (“Article

8”), in addition to stating that the Bitcoin Custodian will serve as fiduciary and custodian on the Trust’s behalf.

possible that a court would not treat custodied digital assets as part of the Bitcoin Custodian’s general estate in the event the

Bitcoin Custodian were to experience insolvency.

However, due to the novelty of digital asset custodial arrangements courts have not yet

considered this type of treatment for custodied digital assets and it is not possible to predict with certainty how they would rule in

such a scenario.

If the Bitcoin Custodian became subject to insolvency proceedings and a court were to rule that the custodied bitcoin

were part of the Bitcoin Custodian’s general estate and not the property of the Trust, then the Trust would be treated as a general

unsecured creditor in the Bitcoin Custodian’s insolvency proceedings and the Trust could be subject to the loss of all or a significant

portion of its assets.

Moreover, in the event of the bankruptcy of the Bitcoin Custodian, an automatic stay could go into effect and protracted

litigation could be required in order to recover the assets held with the Bitcoin Custodian, all of which could significantly and negatively

impact the Trust’s operations and the value of the Shares.

With respect to the Prime Execution Agent Agreement, there is a risk

that the Trading Balance, in which the Trust’s bitcoin and cash is held in omnibus accounts by the Prime Execution Agent could be

considered part of the Prime Execution Agent’s bankruptcy estate in the event of the Prime Execution Agent’s bankruptcy.

Prime Execution Agent Agreement contains an Article 8 opt-in clause with respect to the Trust’s assets held in the Trading Balance.

The Prime Execution Agent is not required to hold any of the bitcoin or cash in the Trust’s Trading Balance in segregation.

the Trading Balance, the Prime Execution Agent Agreement provides that the Trust does not have an identifiable claim to any particular

bitcoin (and cash).

Instead, the Trust’s Trading Balance represents an entitlement to a pro rata share of the bitcoin (and cash)

the Prime Execution Agent has allocated to the omnibus wallets the Prime Execution Agent holds, as well as the accounts in the Prime Execution

Agent’s name that the Prime Execution Agent maintains at a connected trading venue (each, a “Connected Trading Venue”)

(which are typically held on an omnibus, rather than segregated, basis).

If the Prime Execution Agent suffers an insolvency event, there

is a risk that the Trust’s assets held in the Trading Balance could be considered part of the Prime Execution Agent’s bankruptcy

estate and the Trust could be treated as a general unsecured creditor of the Prime Execution Agent, which could result in losses for the

Trust and Shareholders.

Moreover, in the event of the bankruptcy of the Prime Execution Agent, an automatic stay could go into effect

and protracted litigation could be required in order to recover the assets held with the Prime Execution Agent, all of which could significantly

and negatively impact the Trust’s operations and the value of the Shares.

There are no policies that would limit the amount of bitcoin

that can be held temporarily in the Trading Balance maintained by the Prime Execution Agent.

Under the Trust Agreement, the Trustee and the Sponsor will not be

liable for any liability or expense incurred, including, without limitation, as a result of any loss of bitcoin by the Bitcoin Custodian,

absent fraud, bad faith, or willful misconduct on the part of the Sponsor or the Trustee, as the case may be.

As a result, the recourse

of the Trust or the Shareholders to the Trustee or the Sponsor, including in the event of a loss of bitcoin by the Bitcoin Custodian,

The Shareholders’ recourse against the Sponsor, the Trustee,

and the Trust’s other service providers for the services they provide to the Trust, including, without limitation, those relating

to the holding of bitcoin or the provision of instructions relating to the movement of bitcoin, is limited.

For the avoidance of doubt,

neither the Sponsor, the Trustee, nor any of their affiliates, nor any other party has guaranteed the assets or liabilities, or otherwise

assumed the liabilities, of the Trust, or the obligations or liabilities of any service provider to the Trust, including, without limitation,

the Bitcoin Custodian and Prime Execution Agent.

The Prime Execution Agent Agreement and Custodian Agreement provide that neither the

Sponsor, the Trustee, nor their affiliates shall have any obligation of any kind or nature whatsoever, by guaranty, enforcement or otherwise,

with respect to the performance of any the Trust’s obligations, agreements, representations or warranties under the Prime Execution

Agent Agreement or Custodian Agreement or any transaction thereunder.

Consequently, a loss may be suffered with respect to the Trust’s

bitcoin that is not covered by the Bitcoin Custodian’s insurance and for which no person is liability in damages.

As a result, the

recourse of the Trust or the Shareholders, under applicable law, is limited.

If the Trade Credits are not available or become exhausted, the

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on time, its assets may be liquidated by the Trade Credit Lender and its affiliates.

To avoid having to pre-fund purchases or sales of

bitcoin in connection with cash creations and redemptions and sales of bitcoin to pay the Sponsor’s Fee and any other Trust expenses

not assumed by the Sponsor, to the extent applicable, the Trust may acquire Trade Credits from Coinbase Credit, Inc.

Credit Lender”) on a short-term basis pursuant to the Coinbase Trade Financing Agreement (the “Trade Financing Agreement”).

The Trade Credit Lender is only required to extend Trade Credits to the Trust to the extent such bitcoin or cash is actually available

to the Trade Credit Lender and only up to the amount available to the Trust.

To the extent that Trade Credits are not available or become

exhausted, (1) there may be delays in the buying and selling of bitcoin related to cash creations and redemptions or the selling of bitcoin

related to paying the Sponsor’s Fee and any other Trust expenses, to the extent applicable, (2) Trust assets may be in held the

Trading Balance for a longer duration than if Trade Credits were available, and (3) the execution price associated with such trades may

deviate significantly from the Reference Rate used to determine the net asset value of the Trust.

To the extent that the execution price

for purchases and sales of bitcoin related to creations and redemptions and sales of bitcoin in connection with paying the Sponsor’s

Fee and any other Trust expenses deviate significantly from the Reference Rate used to determine the net asset value of the Trust, the

Shareholders may be negatively impacted because the added costs of such price deviations would be incurred by the Authorized Participants

and may be passed onto the Shareholders in the secondary market.

Moreover, this risk factor relating to the unavailability or exhaustion

of the Trade Credits should be interpreted as a heightened risk as a result of the change from the originally contemplated in-kind creations

and redemptions to cash creations and redemptions.

The Trust generally must repay Trade Credits by 6:00

ET (the “Settlement Deadline”) on the calendar day immediately following the day the Trade Credit was extended by the

Trade Credit Lender to the Trust (or, if such day is not a business day, on the next business day).

Pursuant to the Trade Financing Agreement,

the Trust has granted a security interest, lien on, and right of set off against all of the Trust’s right, title and interest, in

the Trust’s Trading Balance and Vault Balance established pursuant to the Prime Execution Agent Agreement and Custodian Agreement,

in order to secure the repayment by the Trust of the Trade Credits and financing fees to the Trade Credit Lender.

Under a variety of circumstances,

including events of default, the Bitcoin Custodian and the Prime Execution Agent have agreed to comply with instructions from the Trade

Credit Lender with respect to the disposition of the assets in the Trust’s Vault Balance and Trading Balance respectively without

further consent by the Trust.

If the Trust fails to repay the Trade Credits to the Trade Credit Lender on time and in full, the Trade

Credit Lender can take control of the Trust’s assets and liquidate them to repay the Trade Credit debt owed by the Trust to the

Trade Credit Lender.

To avoid having to pre-fund purchases or sales of bitcoin in connection

with cash creations and redemptions and sales of bitcoin to pay the Sponsor’s Fee and any other Trust expenses not assumed by the

Sponsor, to the extent applicable, the Trust may acquire Trade Credits from Coinbase Credit, Inc.

(the “Trade Credit Lender”)

on a short-term basis pursuant to the Coinbase Trade Financing Agreement (the “Trade Financing Agreement”).

The Trade Credit

Lender is only required to extend Trade Credits to the Trust to the extent such bitcoin or cash is actually available to the Trade Credit

Lender and only up to the amount available to the Trust.

To the extent that Trade Credits are not available or become exhausted, (1) there

may be delays in the buying and selling of bitcoin related to cash creations and redemptions or the selling of bitcoin related to paying

the Sponsor’s Fee and any other Trust expenses, to the extent applicable, (2) Trust assets may be in held the Trading Balance for

a longer duration than if Trade Credits were available, and (3) the execution price associated with such trades may deviate significantly

from the Reference Rate used to determine the net asset value of the Trust.

To the extent that the execution price for purchases and sales

of bitcoin related to creations and redemptions and sales of bitcoin in connection with paying the Sponsor’s Fee and any other Trust

expenses deviate significantly from the Reference Rate used to determine the net asset value of the Trust, the Shareholders may be negatively

impacted because the added costs of such price deviations would be incurred by the Authorized Participants and may be passed onto the

Shareholders in the secondary market.

Moreover, this risk factor relating to the unavailability or exhaustion of the Trade Credits should

be interpreted as a heightened risk as a result of the change from the originally contemplated in-kind creations and redemptions to cash

creations and redemptions.

The Trust generally must repay Trade Credits by 6:00 p.m.

ET (the “Settlement

Deadline”) on the calendar day immediately following the day the Trade Credit was extended by the Trade Credit Lender to the Trust

(or, if such day is not a business day, on the next business day).

Pursuant to the Trade Financing Agreement, the Trust has granted a

security interest, lien on, and right of set off against all of the Trust’s right, title and interest, in the Trust’s Trading

Balance and Vault Balance established pursuant to the Prime Execution Agent Agreement and Custodian Agreement, in order to secure the

repayment by the Trust of the Trade Credits and financing fees to the Trade Credit Lender.

Under a variety of circumstances, including

events of default, the Bitcoin Custodian and the Prime Execution Agent have agreed to comply with instructions from the Trade Credit Lender

with respect to the disposition of the assets in the Trust’s Vault Balance and Trading Balance respectively without further consent

by the Trust.

If the Trust fails to repay the Trade Credits to the Trade Credit Lender on time and in full, the Trade Credit Lender can

take control of the Trust’s assets and liquidate them to repay the Trade Credit debt owed by the Trust to the Trade Credit Lender.

Loss of a critical banking relationship for, or the failure of

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to the Trust.

The Cash Custodian is necessary to facilitate the

creation and redemption of Baskets (in exchange for cash subscriptions by Authorized Participants, or in exchange for redemptions of Shares

by Authorized Participants), and other cash movements, including in connection with the purchase of bitcoin by the Sponsor to effectuate

subscriptions for cash and the selling of bitcoin to effect redemptions for cash or pay the Sponsor Fee and, to the extent applicable,

other Trust expenses, and in extraordinary circumstances, to effect the liquidation of the Trust’s bitcoin.

The Trust relies on

the Cash Custodian or Prime Execution Agent, as applicable, to hold any cash related to the purchase or sale of bitcoin.

To the extent

that the Trust or Sponsor face difficulty establishing or maintaining banking relationships, the loss of the Trust’s banking partners,

including the Cash Custodian, the Prime Execution Agent faces difficulty establishing or maintaining banking relationships, or there is

an imposition of operational restrictions by these banking partners with the inability for the Trust to utilize other financial institutions,

this may result in a disruption of creation and redemption activity of the Trust, or cause other operational disruptions or adverse effects

for the Trust.

In the future, it is possible that the Trust or Prime Execution Agent could be unable to establish accounts at new banking

partners or establish new banking relationships, or that the banks with which the Trust or Prime Execution Agent is able to establish

relationships may not be as large or well-capitalized or subject to the same degree of prudential supervision as the existing providers.

The Trust could also suffer losses in the event that

a bank in which the Trust holds customer cash, including the cash associated with the Trust’s account at the Cash Custodian, or

a bank used by the Prime Execution Agent, fails, becomes insolvent, enters receivership, is taken over by regulators, enters financial

distress, or otherwise suffers adverse effects to its financial condition or operational status.

Recently, some banks have experienced

financial distress.

If the Cash Custodian or Prime Execution Agent (or banks it relies on) were to experience financial distress or its

financial condition is otherwise affected, the Cash Custodian’s or Prime Execution Agent’s ability to provide services to

the Trust could be affected.

Moreover, the future failure of a bank at which the Trust maintains cash, could result in losses to the Trust,

to the extent the balances are not subject to deposit insurance, notwithstanding the regulatory requirements to which the Cash Custodian

or Prime Execution Agent is subject or other potential protections.

The Cash Custodian is necessary to facilitate the creation and redemption

of Baskets (in exchange for cash subscriptions by Authorized Participants, or in exchange for redemptions of Shares by Authorized Participants),

and other cash movements, including in connection with the purchase of bitcoin by the Sponsor to effectuate subscriptions for cash and

the selling of bitcoin to effect redemptions for cash or pay the Sponsor Fee and, to the extent applicable, other Trust expenses, and

in extraordinary circumstances, to effect the liquidation of the Trust’s bitcoin.

The Trust relies on the Cash Custodian or Prime

Execution Agent, as applicable, to hold any cash related to the purchase or sale of bitcoin.

To the extent that the Trust or Sponsor face

difficulty establishing or maintaining banking relationships, the loss of the Trust’s banking partners, including the Cash Custodian,

the Prime Execution Agent faces difficulty establishing or maintaining banking relationships, or there is an imposition of operational

restrictions by these banking partners with the inability for the Trust to utilize other financial institutions, this may result in a

disruption of creation and redemption activity of the Trust, or cause other operational disruptions or adverse effects for the Trust.

In the future, it is possible that the Trust or Prime Execution Agent could be unable to establish accounts at new banking partners or

establish new banking relationships, or that the banks with which the Trust or Prime Execution Agent is able to establish relationships

may not be as large or well-capitalized or subject to the same degree of prudential supervision as the existing providers.

The Trust could also suffer losses in the event that a bank in which

the Trust holds customer cash, including the cash associated with the Trust’s account at the Cash Custodian, or a bank used by the

Prime Execution Agent, fails, becomes insolvent, enters receivership, is taken over by regulators, enters financial distress, or otherwise

suffers adverse effects to its financial condition or operational status.

Recently, some banks have experienced financial distress.

the Cash Custodian or Prime Execution Agent (or banks it relies on) were to experience financial distress or its financial condition is

otherwise affected, the Cash Custodian’s or Prime Execution Agent’s ability to provide services to the Trust could be affected.

Moreover, the future failure of a bank at which the Trust maintains cash, could result in losses to the Trust, to the extent the balances

are not subject to deposit insurance, notwithstanding the regulatory requirements to which the Cash Custodian or Prime Execution Agent

is subject or other potential protections.

As a result, the Trust could suffer losses.

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Venues may adversely affect the Prime Execution Agent’s business and cause losses for the Trust.

In connection with trading services under the Prime

Execution Agent Agreement, the Prime Execution Agent routinely routes customer orders to Connected Trading Venues, which are third-party

platforms or other trading venues (including the trading venue operated by the Prime Execution Agent).

In connection with these activities,

the Prime Execution Agent may hold bitcoin with such Connected Trading Venues in order to effect customer orders, including the Trust’s

If the Prime Execution Agent were to experience a disruption in the Prime Execution Agent’s access to these Connected Trading

Venues, the Prime Execution Agent’s trading services under the Prime Execution Agent Agreement could be adversely affected to the

extent that the Prime Execution Agent is limited in its ability to execute order flow for its customers, including the Trust.

while the Prime Execution Agent has policies and procedures to help mitigate the Prime Execution Agent’s risks related to routing

orders through third-party trading venues, if any of these third-party trading venues experience any technical, legal, regulatory or other

adverse events, such as shutdowns, delays, system failures, suspension of withdrawals, illiquidity, insolvency, or loss of customer assets,

the Prime Execution Agent might not be able to fully recover the customer’s bitcoin that the Prime Execution Agent has deposited

with these third parties.

As a result, the Prime Execution Agent’s business, operating results and financial condition could be

adversely affected, potentially resulting in its failure to provide services to the Trust or perform its obligations under the Prime Execution

Agent Agreement, and the Trust could suffer resulting losses or disruptions to its operations.

The failure of a Connected Trading Venue

at which the Prime Execution Agent maintains customer bitcoin, including bitcoin associated with the Trust, could result in losses to

the Trust, notwithstanding the regulatory requirements to which the Prime Execution Agent is subject or other potential protections.

In connection with trading services under the Prime Execution Agent

Agreement, the Prime Execution Agent routinely routes customer orders to Connected Trading Venues, which are third-party platforms or

other trading venues (including the trading venue operated by the Prime Execution Agent).

In connection with these activities, the Prime

Execution Agent may hold bitcoin with such Connected Trading Venues in order to effect customer orders, including the Trust’s orders.

If the Prime Execution Agent were to experience a disruption in the Prime Execution Agent’s access to these Connected Trading Venues,

the Prime Execution Agent’s trading services under the Prime Execution Agent Agreement could be adversely affected to the extent

that the Prime Execution Agent is limited in its ability to execute order flow for its customers, including the Trust.

In addition, while

the Prime Execution Agent has policies and procedures to help mitigate the Prime Execution Agent’s risks related to routing orders

through third-party trading venues, if any of these third-party trading venues experience any technical, legal, regulatory or other adverse

events, such as shutdowns, delays, system failures, suspension of withdrawals, illiquidity, insolvency, or loss of customer assets, the

Prime Execution Agent might not be able to fully recover the customer’s bitcoin that the Prime Execution Agent has deposited with

these third parties.

As a result, the Prime Execution Agent’s business, operating results and financial condition could be adversely

affected, potentially resulting in its failure to provide services to the Trust or perform its obligations under the Prime Execution Agent

Agreement, and the Trust could suffer resulting losses or disruptions to its operations.

The failure of a Connected Trading Venue at which

the Prime Execution Agent maintains customer bitcoin, including bitcoin associated with the Trust, could result in losses to the Trust,

notwithstanding the regulatory requirements to which the Prime Execution Agent is subject or other potential protections.

The lack of active trading markets for the Shares of the Trust

may result in losses on Shareholders’ investments at the time of disposition of Shares.

Although Shares of the Trust are publicly listed

and traded on the Exchange, there can be no guarantee that an active trading market for the Trust will develop or be maintained.

If Shareholders

need to sell their Shares at a time when no active market for them exists, the price Shareholders receive for their Shares, assuming that

Shareholders are able to sell them, likely will be lower than the price that Shareholders would receive if an active market did exist

and, accordingly, a Shareholder may suffer losses.

Although Shares of the Trust are publicly listed and traded on the

Exchange, there can be no guarantee that an active trading market for the Trust will develop or be maintained.

If Shareholders need to

sell their Shares at a time when no active market for them exists, the price Shareholders receive for their Shares, assuming that Shareholders

are able to sell them, likely will be lower than the price that Shareholders would receive if an active market did exist and, accordingly,

a Shareholder may suffer losses.

Possible illiquid markets may exacerbate losses or increase the

variability between the Trust’s NAV and its market price.

Bitcoin is a relatively new asset with limited trading

Therefore, the markets for bitcoin may be less liquid and more volatile than other markets for more established products.

may be difficult to execute a bitcoin trade at a specific price when there is a relatively small volume of buy and sell orders in the

bitcoin market.

A market disruption can also make it more difficult to liquidate a position or find a suitable counterparty at a reasonable

Bitcoin is a relatively new asset with limited trading history.

the markets for bitcoin may be less liquid and more volatile than other markets for more established products.

It may be difficult to

execute a bitcoin trade at a specific price when there is a relatively small volume of buy and sell orders in the bitcoin market.

disruption can also make it more difficult to liquidate a position or find a suitable counterparty at a reasonable cost.

Market illiquidity may cause losses for the Trust.

The large size of the positions that the Trust may acquire will increase the risk of illiquidity by both making the positions more difficult

to liquidate and increasing the losses incurred while trying to do so should the Trust need to liquidate its bitcoin, or making it more

difficult for Authorized Participants to acquire or liquidate bitcoin as part of the creation and/or redemption of Shares of the Trust.

Any type of disruption or illiquidity will potentially be exacerbated due to the fact that the Trust will typically invest in bitcoin,

which is highly concentrated.

The large size of

the positions that the Trust may acquire will increase the risk of illiquidity by both making the positions more difficult to liquidate

and increasing the losses incurred while trying to do so should the Trust need to liquidate its bitcoin, or making it more difficult for

Authorized Participants to acquire or liquidate bitcoin as part of the creation and/or redemption of Shares of the Trust.

disruption or illiquidity will potentially be exacerbated due to the fact that the Trust will typically invest in bitcoin, which is highly

concentrated.

Several factors may affect the Trust’s ability to achieve

its investment objective on a consistent basis.

There is no guarantee that the Trust will meet its

investment objective.

There is no guarantee that the Trust will meet its investment objective.

Factors that may affect the Trust’s ability to meet its investment objective include, without limitation:

(1) Authorized Participants’ willingness and ability to purchase and sell bitcoin (or provide cash in relation thereto) in an efficient

manner to effectuate creation and redemption orders;

(1) Authorized Participants’

willingness and ability to purchase and sell bitcoin (or provide cash in relation thereto) in an efficient manner to effectuate creation

and redemption orders;

(2) transaction fees associated with the Bitcoin network;

(3) the bitcoin market

becoming illiquid or disrupted;

(3) the bitcoin market becoming illiquid or disrupted;

(4) the Trust’s Share prices being rounded to the nearest cent and/or valuation methodologies;

the need to conform the Trust’s portfolio holdings to comply with investment restrictions or policies or regulatory or tax law requirements;

(6) early or unanticipated closings of the markets on which bitcoin trades, resulting in the inability of Authorized Participants to execute

intended portfolio transactions;

(5) the need to conform the Trust’s

portfolio holdings to comply with investment restrictions or policies or regulatory or tax law requirements;

(6) early or unanticipated

closings of the markets on which bitcoin trades, resulting in the inability of Authorized Participants to execute intended portfolio transactions;

(7) accounting standards;

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The amount of bitcoin represented by the Shares will decline

The amount of bitcoin represented by the Shares will

continue to be reduced during the life of the Trust due to the transfer of the Trust’s bitcoin to pay for the Sponsor Fee, and to

pay for extraordinary fees and expenses.

This dynamic will occur irrespective of whether the trading price of the Shares rises or falls

in response to changes in the price of bitcoin.

Each outstanding Share represents a fractional, undivided

interest in the bitcoin held by the Trust.

The Trust does not generate any income and transfers bitcoin to pay for the Sponsor Fee, and

to pay for extraordinary fees and expenses.

The amount of bitcoin represented by the Shares will continue to be

reduced during the life of the Trust due to the transfer of the Trust’s bitcoin to pay for the Sponsor Fee, and to pay for extraordinary

fees and expenses.

This dynamic will occur irrespective of whether the trading price of the Shares rises or falls in response to changes

in the price of bitcoin.

Each outstanding Share represents a fractional, undivided interest

in the bitcoin held by the Trust.

The Trust does not generate any income and transfers bitcoin to pay for the Sponsor Fee, and to pay

for extraordinary fees and expenses.

Therefore, the amount of bitcoin represented by each Share will gradually decline over time.

This is also true with respect to Shares that are issued in exchange for additional deposits of bitcoin over time, as the amount of bitcoin

is also true with respect to Shares that are issued in exchange for additional deposits of bitcoin over time, as the amount of bitcoin

required to create Shares proportionally reflects the amount of bitcoin represented by the Shares outstanding at the time of such creation

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price of bitcoin as the amount of bitcoin represented by the Shares gradually declines.

Shareholders should be aware that the gradual decline

in the amount of bitcoin represented by the Shares will occur regardless of whether the trading price of the Shares rises or falls in

response to changes in the price of bitcoin.

Shareholders should be aware that the gradual decline in the amount

of bitcoin represented by the Shares will occur regardless of whether the trading price of the Shares rises or falls in response to changes

in the price of bitcoin.

The development and commercialization of the Trust is subject

to competitive pressures.

The Trust and the Sponsor face competition with respect

to the creation of competing products.

The Sponsor’s competitors may have greater financial, technical and human resources than

These competitors may also compete with the Sponsor in recruiting and retaining qualified personnel.

Smaller or early-stage

companies may also prove to be effective competitors, particularly through collaborative arrangements with large and established companies.

Accordingly, the Sponsor’s competitors may commercialize a product involving bitcoin more rapidly or effectively than the Sponsor

is able to, which could adversely affect the Sponsor’s competitive position, the likelihood that the Trust will achieve initial

market acceptance and the Sponsor’s ability to generate meaningful revenues from the Trust.

The Trust and the Sponsor face competition with respect to the creation

of competing products.

The Sponsor’s competitors may have greater financial, technical and human resources than the Sponsor.

competitors may also compete with the Sponsor in recruiting and retaining qualified personnel.

Smaller or early-stage companies may also

prove to be effective competitors, particularly through collaborative arrangements with large and established companies.

the Sponsor’s competitors may commercialize a product involving bitcoin more rapidly or effectively than the Sponsor is able to,

which could adversely affect the Sponsor’s competitive position, the likelihood that the Trust will achieve initial market acceptance

and the Sponsor’s ability to generate meaningful revenues from the Trust.

The Trust is an emerging growth company, and the Trust cannot

be certain if the reduced disclosure requirements applicable to emerging growth companies will make the Shares less attractive to investors.

The Trust is an emerging growth company, as defined

in the JOBS Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to other public

companies that are not emerging growth companies.

The Trust cannot predict if investors will find the Shares less attractive because of

the Trust’s reliance on these exemptions.

If some investors find the Trust’s Shares less attractive as a result, there may

be a less active trading market for the Shares.

In addition, under the JOBS Act, the Trust’s

independent registered public accounting firm will not be required to attest to the effectiveness of its internal control over financial

reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 for so long as it is an emerging growth company.

For as long as the Trust takes advantage of the reduced

reporting obligations, the information that the Trust provides its Shareholders may be different from information provided by other public

The Trust is an emerging growth company, as defined in the JOBS Act,

and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are

not emerging growth companies.

The Trust cannot predict if investors will find the Shares less attractive because of the Trust’s

reliance on these exemptions.

If some investors find the Trust’s Shares less attractive as a result, there may be a less active

trading market for the Shares.

In addition, under the JOBS Act, the Trust’s independent registered

public accounting firm will not be required to attest to the effectiveness of its internal control over financial reporting pursuant to

Section 404 of the Sarbanes-Oxley Act of 2002 for so long as it is an emerging growth company.

For as long as the Trust takes advantage of the reduced reporting obligations,

the information that the Trust provides its Shareholders may be different from information provided by other public companies.

If the Trust issues all Shares registered or such registration

expires, it could have to cease creating new Baskets until additional shares are registered for sale.

Investors should be aware that if the Trust issues

all Shares registered in this offering or the offering expires, it could have to cease creating new Baskets until additional shares are

registered for sale.

Investors should be aware that if the Trust issues all Shares registered

in this offering or the offering expires, it could have to cease creating new Baskets until additional shares are registered for sale.

This could impact the trading price of the Trust’s Shares.

Moreover, soon after new Baskets are created and

sold under this Annual Report, there is a possibility that the availability of newly created Shares may (or may not) affect the trading

price of the Shares already issued, and both current Shareholders and purchasers of newly created Shares could be adversely affected by

falling trading prices.

Moreover, soon after new Baskets are created and sold under this Annual

Report, there is a possibility that the availability of newly created Shares may (or may not) affect the trading price of the Shares already

issued, and both current Shareholders and purchasers of newly created Shares could be adversely affected by falling trading prices.

Risk Factors Associated with Regulation

and digital assets have grown in both popularity and market size, the U.S.

As bitcoin and digital assets

have grown in both popularity and market size, the U.S.

Congress and a number of U.S.

federal and state agencies have

been examining the operations of digital asset networks, digital asset users and the digital asset spot market.

Many of these state and

federal agencies have brought enforcement actions and issued advisories and rules relating to digital asset markets.

Under the prior administration,

Securities Exchange Commission (the “SEC”) charged certain large US digital asset trading platforms of supporting

trading and settlement of securities in violation of the US federal securities laws.

Specifically, the SEC alleged that these exchanges

are operating as unregistered securities exchanges, brokers and clearing agencies.

Beginning in early 2025, the current administration

took steps to strengthen U.S.

leadership in the digital assets space, including through the use of executive orders and the establishment

of an interagency working group that is tasked with proposing a regulatory framework governing the issuance and operation of digital assets

in the United States.

Meanwhile, the SEC established a new “Crypto Task Force” focused on providing clarity on the application

of the federal securities laws to digital assets and collaborating with the digital asset industry and the public towards establishing

an appropriate regulatory framework and dismissed or paused ongoing enforcement actions or investigations against certain digital asset

platforms and companies, including Coinbase, Binance, Kraken and Uniswap, during the first quarter of 2025.

Congress is also

actively preparing new legislation to address issues relating to digital assets and stablecoins.

The outcome of federal legislation is

highly uncertain and may alter, perhaps to a materially adverse extent, the nature of an investment in the Shares and/or the ability of

the Trust to continue to operate.

Although neither

the SEC nor the CFTC has exerted direct authority over bitcoin or bitcoin spot trading activity, the SEC and CFTC have broad authority

over the regulation of issuances of securities (including digital asset securities) and commodity interests (including derivative instruments

utilizing or referencing digital assets).

The SEC and CFTC’s engagement with the digital asset industry has had a material impact

on the development of digital asset markets, including initial coin offerings, margin trading, regulated and unregulated derivatives markets,

and decentralized finance markets.

For example, the SEC has issued guidance as to the application

of the securities laws to digital assets and initiated enforcement actions against certain digital asset issuers and offerings on the

basis that such digital assets and offerings are securities under U.S.

federal and state agencies (including the Financial

Crimes Enforcement Network (“FinCEN”), SEC, OCC, CFTC, FINRA, the Consumer Financial Protection Bureau (“CFPB”),

the Department of Justice, the Department of Homeland Security, the Federal Bureau of Investigation, the IRS, state financial institution

regulators, and others) have been examining the operations of digital asset networks, digital asset users and the digital asset trading

platform market.

Many of these state and federal agencies have brought enforcement actions and issued advisories and rules relating to

digital asset markets.

Ongoing and future regulatory actions with respect to digital assets generally or any single digital asset in particular

may alter, perhaps to a materially adverse extent, the nature of an investment in the Shares and/or the ability of the Trust to continue

Although neither the SEC nor

the CFTC has exerted direct authority over bitcoin or bitcoin spot trading activity, the SEC and CFTC have broad authority over the regulation

of issuances of securities (including digital asset securities) and commodity interests (including derivative instruments utilizing or

referencing digital assets).

The SEC and CFTC’s engagement with the digital asset industry has had a material impact on the development

of digital asset markets, including initial coin offerings, margin trading, regulated and unregulated derivatives markets, and decentralized

finance markets.

For example, the SEC has issued guidance as to the application of the securities

laws to digital assets and initiated enforcement actions against certain digital asset issuers and offerings on the basis that such digital

assets and offerings are securities under U.S.

securities laws.

In these actions, the SEC reasoned that the unregistered

offer and sale of digital assets can, in certain circumstances, including ICOs, be considered an illegal public offering of securities.

Similarly, the CFTC, together with the Department of Justice, has initiated enforcement actions against digital asset trading platforms

relating to violations of the CEA, on the basis that such platforms engaged in illegal, off-exchange retail commodity transactions in

digital assets and digital asset derivative transactions.

Further enforcement actions against participants in the digital asset industry

could have negative impacts the price of digital assets, including bitcoin.

Under the prior administration, the SEC also targeted

regulated investments that provide exposure to digital assets indirectly.

For example, in a letter regarding the SEC’s review of

proposed rule changes to list and trade shares of certain bitcoin-related investment vehicles on public markets, the SEC staff stated

that it has significant investor protection concerns regarding the markets for digital assets, including the potential for market manipulation

In March 2018, it was reported that the SEC was examining as many as 100 investment funds with strategies focused on digital

The reported focus of the examinations is on the accuracy of risk disclosures to investors in these funds, digital asset pricing

practices, and compliance with rules meant to prevent the theft of investor funds, as well as on information gathering so that the SEC

can better understand new technologies and investment products.

It has further been reported that some of these funds have received subpoenas

from the SEC’s Enforcement Division.

Additionally, the SEC’s Division of Examinations (then the Office of Compliance Inspections

and Examinations (“OCIE”)) stated that digital assets remain an examination priority for 2025.

In particular, OCIE intended

to focus its examination on the offer, sale, recommendation, advice, trading, and other activities involving crypto assets that are offered

and sold as securities or related products, such as spot bitcoin or ether exchange-traded products.

OFAC has added digital currency addresses to the

list of Specially Designated Nationals whose assets are blocked, and with whom U.S.

In these actions, the SEC reasoned that the unregistered offer and sale

of digital assets can, in certain circumstances, including ICOs, be considered an illegal public offering of securities.

Similarly, the

CFTC, together with the Department of Justice, has initiated enforcement actions against digital asset trading platforms relating to violations

of the CEA, on the basis that such platforms engaged in illegal, off-exchange retail commodity transactions in digital assets and digital

asset derivative transactions.

Further enforcement actions against participants in the digital asset industry could have negative impacts

the price of digital assets, including bitcoin.

federal and state regulators have issued reports and releases

concerning crypto assets, including Bitcoin and crypto asset markets.

Beginning in early 2025, the current administration took steps to

strengthen U.S.

leadership in the digital assets space, including through the use of executive orders and the establishment of an interagency

working group that is tasked with proposing a regulatory framework governing the issuance and operation of digital assets in the United

On January 23, 2025, President Trump issued an Executive Order that outlined the administration’s commitment to strengthening

leadership in the digital asset space and established an inter-agency working group for artificial intelligence and crypto that is

tasked with proposing a regulatory framework governing the issuance and operation of digital assets, including stablecoins, in the United

The GENIUS Act, which establishes a federal regulatory framework for stablecoins, was passed by the U.S.

Congress and signed into

law by President Trump on July 18, 2025.

In addition, proposed digital assets market infrastructure legislation, the CLARITY Act, continues

In July 2025, the U.S.

Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and

the Federal Deposit Insurance Corporation issued a statement for banking organizations regarding the safekeeping of digital assets, which

focused on how existing laws, regulations and risk management principles apply to such activities, and signaled additional progress in

the increasing regulatory clarity for digital assets by key financial regulators in the United States.

In January 2025, the then Acting SEC Chairman Uyeda established a new

“Crypto Task Force,” led by Commissioner Hester Peirce, with the intent to develop a comprehensive and clear regulatory framework

for digital assets.

Subsequently, Commissioner Peirce announced a list of specific priorities to further that initiative, which included

pursuing final rules related to a digital asset’s security status, a revised path to registered offerings and listings for digital

asset-based investment vehicles, and clarity regarding digital asset custody, lending and staking, which has held a series of roundtables

focused on digital asset-related initiatives.

Moreover, the SEC dismissed or paused ongoing enforcement actions or investigations against

certain digital asset platforms and companies, including Coinbase, Binance, Kraken and Uniswap, during the first quarter of 2025.

At this time, it is not possible to predict with certainty whether,

or when, any of these legislative and regulatory developments will lead to Congress granting additional authorities to the SEC or other

regulators, what the nature of such additional authorities might be, how they might impact the ability of digital asset markets to function

or how any new regulations or changes to existing regulations might impact the value of digital assets generally and bitcoin held by the

Trust specifically.

The consequences of increased federal regulation of digital assets and digital asset activities could have a material

adverse effect on the Trust and the Shares.

OFAC has added digital currency addresses to the list of Specially

Designated Nationals whose assets are blocked, and with whom U.S.

persons are generally prohibited from dealing.

actions by OFAC, or by similar organizations in other jurisdictions, may introduce uncertainty in the market as to whether bitcoin that

has been associated with such addresses in the past can be easily sold.

This “tainted” bitcoin may trade at a substantial

discount to untainted bitcoin.

Reduced fungibility in the bitcoin markets may reduce the liquidity of bitcoin and therefore adversely

affect its price.

In December 2020, FinCEN, a bureau within the U.S.

Treasury Department, proposed a rule that would require financial institutions to submit reports, keep records, and verify the identity

of customers for certain transactions to or from so-called “unhosted” wallets, also commonly referred to as self-hosted wallets.

In May 2021, the U.S.

Department of Treasury proposed new rules potentially requiring businesses to record transactions in digital assets

that exceed $10,000 in value.

It remains unclear if these proposed rules will ultimately be adopted.

It is not possible to predict whether, or when, any

of these developments will lead to Congress granting additional authorities to the SEC or other regulators, what the nature of such additional

authorities might be, how they might impact the ability of digital asset markets to function or how any new regulations or changes to

existing regulations might impact the value of digital assets generally and bitcoin held by the Trust specifically.

The consequences of

increased federal regulation of digital assets and digital asset activities could have a material adverse effect on the Trust and the

The entire cryptocurrency industry experienced a

significant drawdown in 2022, particularly throughout the latter half of the year.

The decline was due to numerous factors, including

a slowing macroeconomic environment, rising interest rates, expiring pandemic financial assistance, and the public collapse of several

major industry participants, including Three Arrows Capital, Voyager, Celsius, and most recently, FTX and Genesis.

The cryptocurrency

industry’s turbulent drawdown in 2022 is expected to draw increased regulatory and enforcement scrutiny from, among others, the

Department of Justice, the SEC, the CFTC, the White House and Congress, as well as state regulators and authorities.

Developments in the

regulation of digital assets are ongoing.

For example, in July 2023, the U.S.

District Court for the Southern District of New York ruled

on the SEC’s action against Ripple Labs, Inc.

The court found that offers and sales of XRP, a digital token, to institutions and

sophisticated individuals constituted securities transactions, but that offers and sales of XRP on crypto trading platforms, distributions

to employees, and other third-party developers were not securities transactions.

More recently, the D.C.

Circuit Court found that the

SEC’s denial of the Grayscale Bitcoin Trust’s listing was “arbitrary and capricious” under the Administrative

Procedures Act in light of the SEC’s approval of two similar bitcoin futures-based exchange-traded products (“ETPs”).

In the immediate aftermath of this court decision, the price of bitcoin increased from nearly $26,000 to over $28,100.

After the results

presidential election in November 2024, the price of bitcoin rallied to an all-time high of over $100,000 in December 2024

based, in part, on the market’s perception that the new presidential administration would be pro-cryptocurrency.

It is not possible

to predict at this time all of the risks that regulatory developments may pose to the Trust, its service providers or to the digital asset

industry as a whole.

Under regulations from the New York State Department

of Financial Services (“NYDFS”), businesses involved in digital asset business activity for third parties in or involving

New York, excluding merchants and consumers, must apply for a license, commonly known as a BitLicense, from the NYDFS and must comply

with anti-money laundering, cybersecurity, consumer protection, and financial and reporting requirements, among others.

As an alternative

to a BitLicense, a firm can apply for a charter to become a limited purpose trust company under New York law qualified to engage in certain

digital asset business activities.

Other states have considered or approved digital asset business activity statutes or rules, passing,

for example, regulations or guidance indicating that certain digital asset business activities constitute money transmission requiring

The inconsistency in applying money transmitting

licensure requirements to certain businesses may make it more difficult for these businesses to provide services, which may affect consumer

adoption of bitcoin and its price.

In an attempt to address these issues, the Uniform Law Commission passed a model law in July 2017,

the Uniform Regulation of Virtual Currency Businesses Act, which has many similarities to the BitLicense and features a multistate reciprocity

licensure feature, wherein a business licensed in one state could apply for accelerated licensure procedures in other states.

unclear, however, how many states will adopt some or all of the model legislation.

The continued evolution of federal, state and foreign

government regulators and policymakers will continue to impact the viability and success of digital asset markets, broadly, and bitcoin,

specifically.

Such actions by OFAC,

or by similar organizations in other jurisdictions, may introduce uncertainty in the market as to whether bitcoin that has been associated

with such addresses in the past can be easily sold.

This “tainted” bitcoin may trade at a substantial discount to untainted

Reduced fungibility in the bitcoin markets may reduce the liquidity of bitcoin and therefore adversely affect its price.

FinCEN requires any administrator or exchanger of convertible digital

assets to register with FinCEN as a money transmitter and comply with the anti-money laundering regulations applicable to money transmitters.

In 2015, FinCEN assessed a $700,000 fine against a sponsor of a digital asset for violating several requirements of the Bank Secrecy Act

by acting as a money services business and selling the digital asset without registering with FinCEN, and by failing to implement and

maintain an adequate anti-money laundering program.

In 2017, FinCEN assessed a $110 million fine against BTC-e, a now defunct digital

asset trading platform, for similar violations.

The requirement that trading platforms that do business in the U.S.

and comply with anti-money laundering regulations may increase the cost of buying and selling bitcoin and therefore may adversely affect

the price of bitcoin and an investment in the Shares.

In a March 2018 letter from FinCEN’s assistant secretary for legislative affairs

Senator Ron Wyden, the assistant secretary indicated that under current law both the developers and the trading platforms involved

in the sale of tokens in an initial coin offering (“ICO”) may be required to register with FinCEN as money transmitters and

comply with the anti-money laundering regulations applicable to money transmitters.

Under regulations from the New York State Department of Financial Services

(“NYDFS”), businesses involved in digital asset business activity for third parties in or involving New York, excluding merchants

and consumers, must apply for a license, commonly known as a BitLicense, from the NYDFS and must comply with anti-money laundering, cybersecurity,

consumer protection, and financial and reporting requirements, among others.

As an alternative to a BitLicense, a firm can apply for a

charter to become a limited purpose trust company under New York law qualified to engage in certain digital asset business activities.

Other states have considered or approved digital asset business activity statutes or rules, passing, for example, regulations or guidance

indicating that certain digital asset business activities constitute money transmission requiring licensure.

The inconsistency in applying money transmitting licensure requirements

to certain businesses may make it more difficult for these businesses to provide services, which may affect consumer adoption of bitcoin

and its price.

In an attempt to address these issues, the Uniform Law Commission passed a model law in July 2017, the Uniform Regulation

of Virtual Currency Businesses Act, which has many similarities to the BitLicense and features a multistate reciprocity licensure feature,

wherein a business licensed in one state could apply for accelerated licensure procedures in other states.

It is still unclear, however,

how many states, if any, will adopt some or all of the model legislation.

The continued evolution of federal, state and foreign government regulators

and policymakers will continue to impact the viability and success of digital asset markets, broadly, and bitcoin, specifically.

Future and current regulations by a United States or foreign

government or quasi-governmental agency could have an adverse effect on an investment in the Trust.

The regulation of bitcoin and related products and

services continues to evolve, may take many different forms and will, therefore, impact bitcoin and its usage in a variety of manners.

The inconsistent and sometimes conflicting regulatory landscape may make it more difficult for bitcoin businesses to provide services,

including trading markets or platforms, which may impede the growth of the bitcoin economy and have an adverse effect on consumer adoption

of bitcoin or the ability to trade bitcoin.

Many state and federal agencies have brought enforcement actions or issued consumer advisories

regarding the risks posed by digital assets to investors.

There is a possibility of future regulatory change or actions altering, perhaps

to a material extent, the nature of an investment in the Trust or the ability of the Trust to continue to operate.

Additionally, changes to current regulatory determinations

of bitcoin’s status as not being a security under U.S.

federal law, changes to regulations surrounding bitcoin futures or related

products, or actions by a United States or foreign government or quasi-governmental agency exerting regulatory authority over bitcoin,

the Bitcoin network, bitcoin trading, bitcoin mining or related activities impacting other parts of the digital asset market, may adversely

impact bitcoin and therefore may have an adverse effect on the value of your investment in the Trust.

The regulation of bitcoin and related products and services continues

to evolve, may take many different forms and will, therefore, impact bitcoin and its usage in a variety of manners.

The inconsistent and

sometimes conflicting regulatory landscape may make it more difficult for bitcoin businesses to provide services, including trading markets

or platforms, which may impede the growth of the bitcoin economy and have an adverse effect on consumer adoption of bitcoin or the ability

to trade bitcoin.

Many state and federal agencies have brought enforcement actions or issued consumer advisories regarding the risks posed

by digital assets to investors.

There is a possibility of future regulatory change or actions altering, perhaps to a material extent,

the nature of an investment in the Trust or the ability of the Trust to continue to operate.

Additionally, changes to current regulatory determinations of bitcoin’s

status as not being a security under U.S.

federal law, changes to regulations surrounding bitcoin futures or related products, or actions

by a United States or foreign government or quasi-governmental agency exerting regulatory authority over bitcoin, the Bitcoin network,

bitcoin trading, bitcoin mining or related activities impacting other parts of the digital asset market, may adversely impact bitcoin

and therefore may have an adverse effect on the value of your investment in the Trust.

The Trust is not an investment company registered under the 1940

Act or the Commodity Exchange Act.

The Trust is not registered as an investment company

under the 1940 Act and is not subject to the statutory requirements of the 1940 Act.

the Trust will not hold or trade in commodity

interests regulated by the CEA, as administered by the CFTC and that neither the Sponsor nor the Trustee is subject to regulation by the

CFTC as a commodity pool operator or a commodity trading advisor in connection with the operation of the Trust.

Consequently, Shareholders

will not have the statutory protections provided to investors in registered investment companies, CEA-regulated instruments or commodity

The Trust is not registered as an investment company under the 1940

Act and is not subject to the statutory requirements of the 1940 Act.

the Trust will not hold or trade in commodity interests

regulated by the CEA, as administered by the CFTC and that neither the Sponsor nor the Trustee is subject to regulation by the CFTC as

a commodity pool operator or a commodity trading advisor in connection with the operation of the Trust.

Consequently, Shareholders will

not have the statutory protections provided to investors in registered investment companies, CEA-regulated instruments or commodity pools.

Future regulations may require the Trust or the Sponsor to become

registered, which may cause the Trust to liquidate.

Current and future legislation, SEC and CFTC rulemaking,

and other regulatory developments may impact the manner in which bitcoin are treated for classification and clearing purposes.

In particular,

bitcoin in the future may be classified by the CFTC as a “commodity interest” under the CEA and certain transactions in bitcoin

may be deemed to be commodity futures or bitcoin may be classified by the SEC as a “security” under U.S.

federal securities

In the face of such developments, the required registrations and compliance steps may result in extraordinary, nonrecurring expenses

to the Trust.

Current and future legislation, SEC and CFTC rulemaking, and other

regulatory developments may impact the manner in which bitcoin are treated for classification and clearing purposes.

In particular, bitcoin

in the future may be classified by the CFTC as a “commodity interest” under the CEA and certain transactions in bitcoin may

be deemed to be commodity futures or bitcoin may be classified by the SEC as a “security” under U.S.

federal securities laws.

In the face of such developments, the required registrations and compliance steps may result in extraordinary, nonrecurring expenses to

If the Sponsor decides to terminate the Trust in response to the changed regulatory circumstances, the Trust may be dissolved

or liquidated at a time that is disadvantageous to Shareholders.

The SEC has stated that certain digital assets may

be considered “securities” under the federal securities laws.

The test for determining whether a particular digital asset

is a “security” is complex and the outcome is difficult to predict.

If bitcoin is determined to be a “security”

under federal or state securities laws by the SEC or any other agency, or in a proceeding in a court of law or otherwise, such a determination

may have material adverse consequences for bitcoin as a digital asset.

For example, it may become more difficult for bitcoin to be traded,

cleared and custodied as compared to other digital assets that are not considered to be securities, which could in turn negatively affect

the liquidity and general acceptance of bitcoin and cause users to migrate to other digital assets.

Although the SEC’s new “Crypto

Task Force” has indicated that it may re-examine how digital assets are considered “securities” under the federal securities

laws, the timeline and outcome of such action is uncertain at this time.

To the extent that bitcoin is determined to be a

security, the Trust and the Sponsor may also be subject to additional regulatory requirements, including under the 1940 Act, and the Sponsor

may be required to register as an investment adviser under the Investment Advisers Act of 1940.

If the Sponsor determines not to comply

with such additional regulatory and registration requirements, the Sponsor will terminate the Trust.

Any such termination could result

in the liquidation of the Trust’s bitcoin at a time that is disadvantageous to Shareholders.

To the extent that bitcoin is deemed to fall within

the definition of a “commodity interest” under the CEA, the Trust and the Sponsor may be subject to additional regulation

under the CEA and CFTC regulations.

These additional requirements may result in extraordinary, recurring and/or nonrecurring expenses

of the Trust, thereby materially and adversely impacting the Shares.

If the Sponsor and/or the Trust determines not to comply with such

additional regulatory and registration requirements, the Sponsor may terminate the Trust.

Any such termination could result in the liquidation

of the Trust’s bitcoin at a time that is disadvantageous to Shareholders.

The SEC has stated that certain digital assets may be considered “securities”

under the federal securities laws.

The test for determining whether a particular digital asset is a “security” is complex

and the outcome is difficult to predict.

If bitcoin is determined to be a “security” under federal or state securities laws

by the SEC or any other agency, or in a proceeding in a court of law or otherwise, such a determination may have material adverse consequences

for bitcoin as a digital asset.

For example, it may become more difficult for bitcoin to be traded, cleared and custodied as compared

to other digital assets that are not considered to be securities, which could in turn negatively affect the liquidity and general acceptance

of bitcoin and cause users to migrate to other digital assets.

Although the SEC’s new “Crypto Task Force” has indicated

that it may re-examine how digital assets are considered “securities” under the federal securities laws, the timeline and

outcome of such action is uncertain at this time.

To the extent that bitcoin is determined to be a security, the Trust

and the Sponsor may also be subject to additional regulatory requirements, including under the 1940 Act, and the Sponsor may be required

to register as an investment adviser under the Investment Advisers Act of 1940.

If the Sponsor determines not to comply with such additional

regulatory and registration requirements, the Sponsor will terminate the Trust.

Any such termination could result in the liquidation of

the Trust’s bitcoin at a time that is disadvantageous to Shareholders.

To the extent that bitcoin is deemed to fall within the definition

of a “commodity interest” under the CEA, the Trust and the Sponsor may be subject to additional regulation under the CEA and

CFTC regulations.

These additional requirements may result in extraordinary, recurring and/or nonrecurring expenses of the Trust, thereby

materially and adversely impacting the Shares.

If the Sponsor and/or the Trust determines not to comply with such additional regulatory

and registration requirements, the Sponsor may terminate the Trust.

Any such termination could result in the liquidation of the Trust’s

bitcoin at a time that is disadvantageous to Shareholders.

Regulatory changes or interpretations of an Authorized Participant’s,

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of the Shares.

To the extent that the activities of any Authorized

Participant, the Trust or the Sponsor cause it to be deemed a “money services business” (“MSB”) under the regulations

promulgated by FinCEN under the authority of the U.S.

Bank Secrecy Act, such Authorized Participant, the Trust or the Sponsor may be required

to comply with FinCEN regulations, including those that would mandate the Authorized Participant to implement anti-money laundering programs,

make certain reports to FinCEN and maintain certain records.

Similarly, the activities of an Authorized Participant, the Trust or the

Sponsor may require it to be licensed as a money transmitter or as a digital asset business, such as under NYDFS’s BitLicense regulation.

Such additional regulatory obligations may cause

the Authorized Participant, the Trust or the Sponsor to incur extraordinary expenses.

If the Authorized Participant, the Trust or the

Sponsor decide to seek the required licenses, there is no guarantee that they will timely receive them.

The Authorized Participant may

also instead decide to terminate its role as Authorized Participant of the Trust, or the Sponsor may decide to terminate the Trust.

by the Authorized Participant may decrease the liquidity of the Shares, which may adversely affect the value of the Shares, and any termination

of the Trust in response to the changed regulatory circumstances may be at a time that is disadvantageous to the Shareholders.

To the extent that the activities of any Authorized Participant, the

Trust or the Sponsor cause it to be deemed a “money services business” (“MSB”) under the regulations promulgated

by FinCEN under the authority of the U.S.

Bank Secrecy Act, such Authorized Participant, the Trust or the Sponsor may be required to comply

with FinCEN regulations, including those that would mandate the Authorized Participant to implement anti-money laundering programs, make

certain reports to FinCEN and maintain certain records.

Similarly, the activities of an Authorized Participant, the Trust or the Sponsor

may require it to be licensed as a money transmitter or as a digital asset business, such as under NYDFS’s BitLicense regulation.

Such additional regulatory obligations may cause the Authorized Participant,

the Trust or the Sponsor to incur extraordinary expenses.

If the Authorized Participant, the Trust or the Sponsor decide to seek the required

licenses, there is no guarantee that they will timely receive them.

The Authorized Participant may also instead decide to terminate its

role as Authorized Participant of the Trust, or the Sponsor may decide to terminate the Trust.

Termination by the Authorized Participant

may decrease the liquidity of the Shares, which may adversely affect the value of the Shares, and any termination of the Trust in response

to the changed regulatory circumstances may be at a time that is disadvantageous to the Shareholders.

Trading on bitcoin platforms outside the United States is not

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impact the value of Shares.

To the extent any of the Trust’s trading is

conducted on bitcoin platforms outside the U.S., trading on such exchanges is not regulated by any U.S.

governmental agency and may involve

certain risks not applicable to trading on U.S.

To the extent any of the Trust’s trading is conducted on bitcoin

platforms outside the U.S., trading on such exchanges is not regulated by any U.S.

governmental agency and may involve certain risks not

applicable to trading on U.S.

Certain foreign markets may be more susceptible to disruption than U.S.

These factors could adversely affect the performance of the Trust.

Various foreign jurisdictions have, and may continue

to adopt laws, regulations or directives that affect digital asset networks (including the Bitcoin network), the digital asset markets

(including the bitcoin market), and their users, particularly digital asset platforms and service providers that fall within such jurisdictions’

These factors

could adversely affect the performance of the Trust.

Various foreign jurisdictions have, and may continue to adopt laws,

regulations or directives that affect digital asset networks (including the Bitcoin network), the digital asset markets (including the

bitcoin market), and their users, particularly digital asset platforms and service providers that fall within such jurisdictions’

regulatory scope.

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to continue to operate may be adversely affected.

The Trust is dependent on the Bitcoin Custodian and

Prime Execution Agent to operate.

The Bitcoin Custodian performs essential functions in terms of safekeeping the Trust’s bitcoin

in the Vault Balance and the Prime Execution Agent facilitates the buying and selling or settlement of bitcoin by the Trust in connection

with cash creations and redemptions between the Trust and Authorized Participants, the selling of bitcoin to pay the Sponsor’s Fee,

any other Trust expenses, to the extent applicable, other Trust expenses, and in extraordinary circumstances, to liquidate the Trust’s

The Sponsor could decide to replace the Bitcoin Custodian as the custodian of the Trust’s bitcoin or the Prime Execution

Agent to facilitate buying and selling or settlement of bitcoin or the Bitcoin Custodian or Prime Execution Agent could experience issues,

exit the business or terminate its relationship with the Trust.

The Trust is dependent on the Bitcoin Custodian and Prime Execution

Agent to operate.

The Bitcoin Custodian performs essential functions in terms of safekeeping the Trust’s bitcoin in the Vault Balance

and the Prime Execution Agent facilitates the buying and selling or settlement of bitcoin by the Trust in connection with cash creations

and redemptions between the Trust and Authorized Participants, the selling of bitcoin to pay the Sponsor’s Fee, any other Trust

expenses, to the extent applicable, other Trust expenses, and in extraordinary circumstances, to liquidate the Trust’s bitcoin.

The Sponsor could decide to replace the Bitcoin Custodian as the custodian of the Trust’s bitcoin or the Prime Execution Agent to

facilitate buying and selling or settlement of bitcoin or the Bitcoin Custodian or Prime Execution Agent could experience issues, exit

the business or terminate its relationship with the Trust.

If either entity fails to perform the functions they perform for the Trust,

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of the Trust’s assets.

The Sponsor may not be able to find another party

willing to serve as the custodian or prime execution agent under the same terms as the current applicable agreement.

To the extent that

Sponsor is not able to find a suitable party willing to serve as the custodian or prime execution agent, the Sponsor may be required to

terminate the Trust and liquidate the Trust’s bitcoin.

In addition, to the extent that the Sponsor finds a suitable party but must

enter into a modified servicing agreement that is less favorable for the Trust or Sponsor, the value of the Shares could be adversely

The Sponsor may not be able to find a party willing

to serve as the custodian of the Trust’s bitcoin or as the Trust’s prime execution agent under the same terms as the current

Custodian Agreement or agreement with prime execution agent or at all.

To the extent that Trustee is not able to find a suitable party

willing to serve as the custodian or prime execution agent, it may be necessary to terminate the Trust and liquidate the Trust’s

In addition, to the extent that the Sponsor finds a suitable party but must enter into a modified Custodian Agreement or modified

agreement with prime execution agent that is less favorable for the Trust, the value of the Shares could be adversely affected.

Trust is unable to find a replacement prime execution agent, its operations could be adversely affected.

The Sponsor may not be able to find another party willing to serve

as the custodian or prime execution agent under the same terms as the current applicable agreement.

To the extent that Sponsor is not

able to find a suitable party willing to serve as the custodian or prime execution agent, the Sponsor may be required to terminate the

Trust and liquidate the Trust’s bitcoin.

In addition, to the extent that the Sponsor finds a suitable party but must enter into

a modified servicing agreement that is less favorable for the Trust or Sponsor, the value of the Shares could be adversely affected.

The Sponsor may not be able to find a party willing to serve as the

custodian of the Trust’s bitcoin or as the Trust’s prime execution agent under the same terms as the current Custodian Agreement

or agreement with prime execution agent or at all.

To the extent that Trustee is not able to find a suitable party willing to serve as

the custodian or prime execution agent, it may be necessary to terminate the Trust and liquidate the Trust’s bitcoin.

to the extent that the Sponsor finds a suitable party but must enter into a modified Custodian Agreement or modified agreement with prime

execution agent that is less favorable for the Trust, the value of the Shares could be adversely affected.

If the Trust is unable to find

a replacement prime execution agent, its operations could be adversely affected.

The Trust Administrator calculates the NAV using the value of

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an adverse effect on the value of the Shares.

The Trust Administrator calculates the Trust’s

NAV using the value of the Trust’s bitcoin holdings and bitcoin holdings per Share on a daily basis as soon as practicable after

ET on each business day.

The Trust Administrator calculates the Trust’s NAV using the

value of the Trust’s bitcoin holdings and bitcoin holdings per Share on a daily basis as soon as practicable after 4:00 p.m.

on each business day.

The NAV is generally calculated utilizing the Reference Rate, calculated at 4:00 p.m.

ET on such day.

To the extent that the bitcoin holdings or bitcoin holdings per Share are incorrectly calculated, the Trust Administrator may not be liable

for any error and such misreporting of valuation data could adversely affect the value of the Shares.

To the extent

that the bitcoin holdings or bitcoin holdings per Share are incorrectly calculated, the Trust Administrator may not be liable for any

error and such misreporting of valuation data could adversely affect the value of the Shares.

The value of the Shares will be adversely affected if the Trust

1 unchanged sentence

under the Trust documents.

Under the Trust documents, each of the Sponsor, the

Trustee, the Trust Administrator, the Transfer Agent, the Bitcoin Custodian and the Cash Custodian has a right to be indemnified by the

Trust for certain liabilities or expenses that it incurs without bad faith and/or willful misconduct on its part.

Therefore, such obligation(s)

may require that the assets of the Trust be sold in order to cover losses or liability suffered by it.

Any sale of that kind would reduce

the bitcoin holdings of the Trust and the value of the Shares.

Under the Trust documents, each of the Sponsor, the Trustee, the Trust

Administrator, the Transfer Agent, the Bitcoin Custodian and the Cash Custodian has a right to be indemnified by the Trust for certain

liabilities or expenses that it incurs without bad faith and/or willful misconduct on its part.

Therefore, such obligation(s) may require

that the assets of the Trust be sold in order to cover losses or liability suffered by it.

Any sale of that kind would reduce the bitcoin

holdings of the Trust and the value of the Shares.

Intellectual property rights claims may adversely affect the

Trust and the value of the Shares.

The Sponsor is not aware of any intellectual property

rights claims that may prevent the Trust from operating and holding bitcoin.

However, third parties may assert intellectual property rights

claims relating to the operation of the Trust and the mechanics instituted for the investment in, holding of and transfer of bitcoin.

Regardless of the merit of an intellectual property or other legal action, any legal expenses to defend or payments to settle such claims

would be extraordinary expenses that would be borne by the Trust through the sale or transfer of its bitcoin.

Additionally, a meritorious

intellectual property rights claim could prevent the Trust from operating and force the Sponsor to terminate the Trust and liquidate its

As a result, an intellectual property rights claim against the Trust could adversely affect the value of the Shares.

The Sponsor is not aware of any intellectual property rights claims

that may prevent the Trust from operating and holding bitcoin.

However, third parties may assert intellectual property rights claims relating

to the operation of the Trust and the mechanics instituted for the investment in, holding of and transfer of bitcoin.

Regardless of the

merit of an intellectual property or other legal action, any legal expenses to defend or payments to settle such claims would be extraordinary

expenses that would be borne by the Trust through the sale or transfer of its bitcoin.

Additionally, a meritorious intellectual property

rights claim could prevent the Trust from operating and force the Sponsor to terminate the Trust and liquidate its bitcoin.

an intellectual property rights claim against the Trust could adversely affect the value of the Shares.

Risk Factors Associated with Taxation

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distribution of the Trust.

In the normal course of business, it is possible

that the Trust could incur a taxable gain in connection with the sale of bitcoin (including deemed sales of bitcoin as a result of the

Trust using bitcoin to pay its expenses) that is otherwise not associated with a distribution to Shareholders., In the event that purchases

and sales of bitcoin occur, Shareholders may be subject to tax due to the grantor trust status of the Trust even though there is not a

corresponding distribution from the Trust.

In the normal course of business, it is possible that the Trust could

incur a taxable gain in connection with the sale of bitcoin (including deemed sales of bitcoin as a result of the Trust using bitcoin

to pay its expenses) that is otherwise not associated with a distribution to Shareholders., In the event that purchases and sales of bitcoin

occur, Shareholders may be subject to tax due to the grantor trust status of the Trust even though there is not a corresponding distribution

from the Trust.

The tax treatment of bitcoin and transactions involving bitcoin

for United States federal income tax purposes may change.

Current IRS guidance indicates that bitcoin should

be treated as property for U.S.

federal income tax purposes and that transactions involving the exchange of bitcoin in return for goods

and services should be treated as barter exchanges.

Such guidance allows transactions in bitcoin held for investment to qualify for beneficial

capital gains treatment.

Current IRS guidance indicates that bitcoin should be treated as property

federal income tax purposes and that transactions involving the exchange of bitcoin in return for goods and services should be

treated as barter exchanges.

Such guidance allows transactions in bitcoin held for investment to qualify for beneficial capital gains

However, because bitcoin is a new technological innovation, the U.S.

federal income tax treatment of an investment

in bitcoin or in transactions relating to investments in bitcoin, including without limitation the tax treatment of a fork, may evolve

and change from those described in this Annual Report, possibly with retroactive effect.

federal income tax treatment of an investment in bitcoin

or in transactions relating to investments in bitcoin, including without limitation the tax treatment of a fork, may evolve and change

from those described in this Annual Report, possibly with retroactive effect.

Any such change in the U.S.

federal income tax

treatment of bitcoin may have a negative effect on prices of bitcoin and may adversely affect the value of the Shares.

In this regard,

the IRS has indicated that it has made it a priority to issue additional guidance related to the taxation of virtual currency transactions,

such as transactions involving bitcoin.

While it has started to issue such additional guidance, whether any future guidance will adversely

affect the U.S.

federal income tax treatment

of bitcoin may have a negative effect on prices of bitcoin and may adversely affect the value of the Shares.

In this regard, the IRS has

indicated that it has made it a priority to issue additional guidance related to the taxation of virtual currency transactions, such as

transactions involving bitcoin.

While it has started to issue such additional guidance, whether any future guidance will adversely affect

federal income tax treatment of an investment in bitcoin or in transactions relating to investments in bitcoin is unknown.

Moreover, future developments that may arise with respect to digital currencies may increase the uncertainty with respect to the treatment

of digital currencies for U.S.

future developments that may arise with respect to digital currencies may increase the uncertainty with respect to the treatment of digital

currencies for U.S.

federal income tax purposes.

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for state and local tax purposes is not settled.

Because bitcoin is a new technological innovation,

the tax treatment of bitcoin for state and local tax purposes, including without limitation state and local income and sales and use taxes,

is not settled.

It is uncertain what guidance, if any, on the treatment of bitcoin for state and local tax purposes may be issued in the

A state or local government authority’s treatment of bitcoin may have negative consequences, including the imposition of

a greater tax burden on investors in bitcoin or the imposition of a greater cost on the acquisition and disposition of bitcoin generally.

Any such treatment may have a negative effect on prices of bitcoin and may adversely affect the value of the Shares.

Because bitcoin is a new technological innovation, the tax treatment

of bitcoin for state and local tax purposes, including without limitation state and local income and sales and use taxes, is not settled.

It is uncertain what guidance, if any, on the treatment of bitcoin for state and local tax purposes may be issued in the future.

or local government authority’s treatment of bitcoin may have negative consequences, including the imposition of a greater tax burden

on investors in bitcoin or the imposition of a greater cost on the acquisition and disposition of bitcoin generally.

Any such treatment

may have a negative effect on prices of bitcoin and may adversely affect the value of the Shares.

Other Risk Factors

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in the Trust’s Shares, which would adversely impact a Shareholder’s ability to sell Shares.

The Trust’s Shares are listed for trading on

the Exchange under the market symbol “BTCW.” Trading in Shares may be halted due to market conditions or, in light of the

Exchange rules and procedures, for reasons that, in the view of the Exchange, make trading in Shares inadvisable.

In addition, trading

is subject to trading halts caused by extraordinary market volatility pursuant to “circuit breaker” rules that require trading

to be halted for a specified period based on a specified market decline.

Additionally, there can be no assurance that the requirements

necessary to maintain the listing of the Trust’s Shares will continue to be met or will remain unchanged.

The Trust’s Shares are listed for trading on the Exchange under

the market symbol “BTCW.” Trading in Shares may be halted due to market conditions or, in light of the Exchange rules and

procedures, for reasons that, in the view of the Exchange, make trading in Shares inadvisable.

In addition, trading is subject to trading

halts caused by extraordinary market volatility pursuant to “circuit breaker” rules that require trading to be halted for

a specified period based on a specified market decline.

Additionally, there can be no assurance that the requirements necessary to maintain

the listing of the Trust’s Shares will continue to be met or will remain unchanged.

The liquidity of the Shares may also be affected by the withdrawal

from participation of Authorized Participants or other market participants, which could adversely affect the market price of the Shares.

The Trust has a limited number of financial institutions

that may act as Authorized Participants.

In addition, there may be a limited number of market makers and/or liquidity providers in the

In the event that one or more Authorized Participants or market makers that have substantial interests in the Trust’s

Shares withdraw, “step away” from participation, or have a business disruption or otherwise become unable or unwilling to

participate, in the purchase (creation) or sale (redemption) of the Trust’s Shares, the liquidity of the Shares will likely decrease,

which could adversely affect the market price of the Shares and result in Shareholders incurring a loss on their investment.

The Trust has a limited number of financial institutions that may act

as Authorized Participants.

In addition, there may be a limited number of market makers and/or liquidity providers in the marketplace.

In the event that one or more Authorized Participants or market makers that have substantial interests in the Trust’s Shares withdraw,

“step away” from participation, or have a business disruption or otherwise become unable or unwilling to participate, in the

purchase (creation) or sale (redemption) of the Trust’s Shares, the liquidity of the Shares will likely decrease, which could adversely

affect the market price of the Shares and result in Shareholders incurring a loss on their investment.

The market infrastructure of the bitcoin spot market could result

in the absence of active Authorized Participants able to support the trading activity of the Trust.

Bitcoin is extremely volatile, and concerns exist

about the stability, reliability and robustness of many bitcoin platforms.

In a highly volatile market, or if one or more bitcoin platforms

faces an issue, it could be extremely challenging for any Authorized Participant to provide continuous liquidity in the Shares.

can be no guarantee that the Sponsor will be able to find an Authorized Participant to actively and continuously support the Trust.

Bitcoin is extremely volatile, and concerns exist about the stability,

reliability and robustness of many bitcoin platforms.

In a highly volatile market, or if one or more bitcoin platforms faces an issue,

it could be extremely challenging for any Authorized Participant to provide continuous liquidity in the Shares.

There can be no guarantee

that the Sponsor will be able to find an Authorized Participant to actively and continuously support the Trust.

Bitcoin platforms are not subject to same regulatory oversight

as traditional equity exchanges, which could negatively impact the ability of Authorized Participants to implement arbitrage mechanisms.

The trading for bitcoin occurs on multiple trading

venues that have various levels and types of regulation, but are not regulated in the same manner as traditional stock and bond exchanges.

If these bitcoin platforms do not operate smoothly or face technical, security or regulatory issues, that could impact the ability of

Authorized Participants to make markets in the Shares.

In such an event, trading in the Shares could occur at a material premium or discount

The trading for bitcoin occurs on multiple trading venues that have

various levels and types of regulation, but are not regulated in the same manner as traditional stock and bond exchanges.

If these bitcoin

platforms do not operate smoothly or face technical, security or regulatory issues, that could impact the ability of Authorized Participants

to make markets in the Shares.

In such an event, trading in the Shares could occur at a material premium or discount to the NAV.

Shareholders that are not Authorized Participants may only purchase

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may adversely affect Shareholders’ investment in the Shares.

Only Authorized Participants may create or redeem

All other Shareholders that desire to purchase or sell Shares must do so through the Exchange or in other markets, if any, in

which the Shares may be traded.

Only Authorized Participants may create or redeem Baskets.

Shareholders that desire to purchase or sell Shares must do so through the Exchange or in other markets, if any, in which the Shares may

Shares may trade at a premium or discount to the NAV per Share.

Investors in Shares should note that while transferring

Shares, specific risks should be noted.

To generally initiate a transfer, a transaction must be signed using the private key of the asset

The private key should remain secret at all times.

If the private key is not secured when in use, an asset holder risks their

private key being obtained by third parties, including criminals, and risk losing all or some of their investment.

Platforms are a popular venue for bitcoin investors

to store assets and facilitate transactions with other participants.

As with any financial transaction, investors in Shares need to ensure

adequate controls are in place to authenticate themselves on these platforms.

Failure to follow security best practices, including multifactor

authentication (MFA), well-formed strong passwords and checks on the validity of platform URLs may risk unauthorized transfer and loss

Investors in Shares should note that while transferring Shares, specific

risks should be noted.

To generally initiate a transfer, a transaction must be signed using the private key of the asset holder.

key should remain secret at all times.

If the private key is not secured when in use, an asset holder risks their private key being obtained

by third parties, including criminals, and risk losing all or some of their investment.

Platforms are a popular venue for bitcoin investors to store assets

and facilitate transactions with other participants.

As with any financial transaction, investors in Shares need to ensure adequate controls

are in place to authenticate themselves on these platforms.

Failure to follow security best practices, including multifactor authentication

(MFA), well-formed strong passwords and checks on the validity of platform URLs may risk unauthorized transfer and loss of assets.

As the Sponsor and its management have limited history of operating

investment vehicles like the Trust, their experience may be inadequate or unsuitable to manage the Trust.

The past performances of the Sponsor’s management

or affiliates of the Sponsor in other investment vehicles are no indication of their ability to manage an investment vehicle such as the

If the experience of the Sponsor and its management is inadequate or unsuitable to manage an investment vehicle such as the Trust,

the operations of the Trust may be adversely affected.

Furthermore, management of the Sponsor is currently engaged in the management of,

or are otherwise involved with the operations of, other investment vehicles which could divert their attention and resources.

The past performances of the Sponsor’s management or affiliates

of the Sponsor in other investment vehicles are no indication of their ability to manage an investment vehicle such as the Trust.

experience of the Sponsor and its management is inadequate or unsuitable to manage an investment vehicle such as the Trust, the operations

of the Trust may be adversely affected.

Furthermore, management of the Sponsor is currently engaged in the management of, or are otherwise

involved with the operations of, other investment vehicles which could divert their attention and resources.

The Sponsor is leanly staffed and relies heavily on key personnel.

The Sponsor is leanly staffed and relies heavily

on key personnel to manage its activities.

These key personnel intend to allocate their time managing the Trust in a manner that they

deem appropriate.

If such key personnel were to leave or be unable to carry out their present responsibilities, it may have an adverse

effect on the management of the Sponsor.

The Sponsor is leanly staffed and relies heavily on key personnel to

manage its activities.

These key personnel intend to allocate their time managing the Trust in a manner that they deem appropriate.

such key personnel were to leave or be unable to carry out their present responsibilities, it may have an adverse effect on the management

of the Sponsor.

The Trust is new, and if it is not profitable, the Trust may

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The Trust is new.

If the Trust does not attract sufficient

assets to remain viable, then the Trust could be terminated and liquidated at the direction of the Sponsor.

Termination and liquidation

of the Trust could occur at a time that is disadvantageous to Shareholders.

When the Trust’s assets are sold as part of the Trust’s

liquidation, the resulting proceeds distributed to Shareholders may be less than those that may be realized in a sale outside of a liquidation

Shareholders may be adversely affected by redemption or creation orders that are subject to postponement, suspension or rejection

under certain circumstances.

If the Trust does not attract sufficient assets to

remain viable, then the Trust could be terminated and liquidated at the direction of the Sponsor.

Termination and liquidation of the Trust

could occur at a time that is disadvantageous to Shareholders.

When the Trust’s assets are sold as part of the Trust’s liquidation,

the resulting proceeds distributed to Shareholders may be less than those that may be realized in a sale outside of a liquidation context.

Shareholders may be adversely affected by redemption or creation orders that are subject to postponement, suspension or rejection under

certain circumstances.

Shareholders do not have the rights enjoyed by investors in certain

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The Shares have limited voting and distribution rights.

For example, Shareholders do not have the right to elect directors, the Trust may enact splits or reverse splits without Shareholder approval

and the Trust is not required to pay regular distributions, although the Trust may pay distributions at the discretion of the Sponsor.

Shareholders do not have the right to elect directors, the Trust may enact splits or reverse splits without Shareholder approval and the

Trust is not required to pay regular distributions, although the Trust may pay distributions at the discretion of the Sponsor.

An investment in the Trust may be adversely affected by competition

from other ETFs focused on bitcoin.

The Trust and the Sponsor face competition with respect

to the creation of competing products.

In January 2024, the SEC approved several exchange-traded bitcoin products and the Trust could

fail to acquire substantial assets, initially or at all, or fail to retain acquired assets due to competition and/or market conditions.

The Trust’s bitcoin ETF competitors may also charge a substantially lower fee than the Sponsor’s Fee in order to achieve initial

market acceptance and scale.

Accordingly, the Trust’s bitcoin ETF competitors may commercialize a competing bitcoin ETF more rapidly

or effectively than the Trust, which could adversely affect the Trust’s competitive position and the likelihood that the Trust will

achieve initial market acceptance, and could have a detrimental effect on the scale and sustainability of the Trust.

If the Trust fails

to achieve sufficient scale due to competition, the Sponsor may have difficulty raising approximately $450 million in assets which would

be sufficient to cover the costs associated with launching and maintaining the Trust and such shortfalls could impact the Sponsor’s

ability to properly invest in robust ongoing operations and controls of the Trust to minimize the risk of operating events, errors, or

other forms of losses to the Shareholders.

In addition, the Trust may also fail to attract adequate liquidity in the secondary market

due to such competition, resulting in a sub-standard number of Authorized Participants willing to make a market in the Shares, which in

turn could result in a significant premium or discount in the Shares for extended periods and the Trust’s failure to reflect the

performance of the price of bitcoin.

The Trust and the Sponsor face competition with respect to the creation

of competing products.

In January 2024, the SEC approved several exchange-traded bitcoin products and the Trust could fail to acquire

substantial assets, initially or at all, or fail to retain acquired assets due to competition and/or market conditions.

bitcoin ETF competitors may also charge a substantially lower fee than the Sponsor’s Fee in order to achieve initial market acceptance

Accordingly, the Trust’s bitcoin ETF competitors may commercialize a competing bitcoin ETF more rapidly or effectively

than the Trust, which could adversely affect the Trust’s competitive position and the likelihood that the Trust will achieve initial

market acceptance, and could have a detrimental effect on the scale and sustainability of the Trust.

If the Trust fails to achieve sufficient

scale due to competition, the Sponsor may have difficulty raising approximately $450 million in assets which would be sufficient to cover

the costs associated with launching and maintaining the Trust and such shortfalls could impact the Sponsor’s ability to properly

invest in robust ongoing operations and controls of the Trust to minimize the risk of operating events, errors, or other forms of losses

to the Shareholders.

In addition, the Trust may also fail to attract adequate liquidity in the secondary market due to such competition,

resulting in a sub-standard number of Authorized Participants willing to make a market in the Shares, which in turn could result in a

significant premium or discount in the Shares for extended periods and the Trust’s failure to reflect the performance of the price

An investment in the Trust may be adversely affected by competition

from other investment vehicles focused on bitcoin or other cryptocurrencies.

The Trust competes with direct investments in bitcoin,

other digital assets and other potential financial vehicles, possibly including securities backed by or linked to cryptocurrency and other

investment vehicles that focus on other digital assets.

Market and financial conditions, and other conditions beyond the Trust’s

control, may make it more attractive to invest in other vehicles, which could adversely affect the performance of the Trust.

a failure of any competitive bitcoin ETF or similar trust or other instrument could have negative consequences with respect to the price

of bitcoin generally or interest in bitcoin ETFs.

The Trust competes with direct investments in bitcoin, other digital

assets and other potential financial vehicles, possibly including securities backed by or linked to cryptocurrency and other investment

vehicles that focus on other digital assets.

Market and financial conditions, and other conditions beyond the Trust’s control, may

make it more attractive to invest in other vehicles, which could adversely affect the performance of the Trust.

In addition, a failure

of any competitive bitcoin ETF or similar trust or other instrument could have negative consequences with respect to the price of bitcoin

generally or interest in bitcoin ETFs.

Coinbase serves as the bitcoin custodian and prime execution

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the value of the Shares.

The Prime Execution Agent and Bitcoin Custodian are

both affiliates of Coinbase Global.

As of the date hereof, Coinbase Global is the largest publicly traded digital asset company in the

world by market capitalization and is also the largest digital asset custodian in the world by assets under custody.

By virtue of its

leading market position and capabilities, and the relatively limited number of institutionally capable providers of digital asset brokerage

and custody services, Coinbase serves as the bitcoin custodian and prime execution agent for several competing exchange-traded bitcoin

products and, as such, plays a critical role in supporting the U.S.

The Prime Execution Agent and Bitcoin Custodian are both affiliates

of Coinbase Global.

As of the date hereof, Coinbase Global is the largest publicly traded digital asset company in the world by market

capitalization and is also the largest digital asset custodian in the world by assets under custody.

By virtue of its leading market position

and capabilities, and the relatively limited number of institutionally capable providers of digital asset brokerage and custody services,

Coinbase serves as the bitcoin custodian and prime execution agent for several competing exchange-traded bitcoin products and, as such,

plays a critical role in supporting the U.S.

spot bitcoin exchange-traded product ecosystem.

If Coinbase were to

favor the interests of certain exchange-traded products over others, it could result in inadequate attention or comparatively unfavorable

commercial terms to less favored products, which could adversely affect the Trust’s operations and ultimately the value of the Shares,

particularly given the limited number of qualified alternative providers.

If Coinbase were to favor the interests of

certain exchange-traded products over others, it could result in inadequate attention or comparatively unfavorable commercial terms to

less favored products, which could adversely affect the Trust’s operations and ultimately the value of the Shares, particularly

given the limited number of qualified alternative providers.

Authorized Participants serve in a similar capacity on behalf

of several, competing exchange-traded bitcoin products, which could adversely affect the value or availability of the Shares.

Baskets may be created or redeemed only by Authorized

Participants, but the Authorized Participants are not required or obligated to engage in the creation or redemption of Baskets.

has a limited number of entities that may act as Authorized Participants, and the Authorized Participants act in a similar capacity for

competing exchange-traded bitcoin products.

To the extent one or more Authorized Participants chooses to transact with or favor the interests

of certain exchange-traded bitcoin products over others, or such Authorized Participants exit the business or are unable to proceed with

creation or redemption orders with respect to the Trust and no other Authorized Participant creates or redeems Baskets, the Shares may

be more likely to trade at a premium or discount to NAV and potentially face trading halts or delisting.

Baskets may be created or redeemed only by Authorized Participants,

but the Authorized Participants are not required or obligated to engage in the creation or redemption of Baskets.

The Trust has a limited

number of entities that may act as Authorized Participants, and the Authorized Participants act in a similar capacity for competing exchange-traded

bitcoin products.

To the extent one or more Authorized Participants chooses to transact with or favor the interests of certain exchange-traded

bitcoin products over others, or such Authorized Participants exit the business or are unable to proceed with creation or redemption orders

with respect to the Trust and no other Authorized Participant creates or redeems Baskets, the Shares may be more likely to trade at a

premium or discount to NAV and potentially face trading halts or delisting.

Shareholders cannot be assured of the Sponsor’s continued

services, the discontinuance of which may be detrimental to the Trust.

Shareholders cannot be assured that the Sponsor will

be able to continue to service the Trust for any length of time.

If the Sponsor discontinues its activities on behalf of the Trust, the

Trust may be adversely affected, as there may be no entity servicing the Trust for a period of time.

Such an event could result in termination

of the Trust and a liquidation of its bitcoin.

Shareholders cannot be assured that the Sponsor will be able to continue

to service the Trust for any length of time.

If the Sponsor discontinues its activities on behalf of the Trust, the Trust may be adversely

affected, as there may be no entity servicing the Trust for a period of time.

Such an event could result in termination of the Trust and

a liquidation of its bitcoin.

Shareholders may be adversely affected by creation or redemption

orders that are subject to postponement, suspension or rejection under certain circumstances.

The Trust may, in its discretion, suspend the right

of creation or redemption or may postpone the redemption or purchase settlement date, for (1) any period during which an emergency exists

as a result of which the fulfillment of a purchase order or the redemption distribution is not reasonably practicable, or (2) such other

period as the Sponsor determines to be necessary for the protection of the Shareholders of the Trust or if it is not feasible for Shares

to be delivered or the redemption distribution to be made.

In addition, the Trust may reject a redemption order if the order is not in

proper form as described in the Authorized Participant Agreement or if the fulfillment of the order might be unlawful as determined by

the Sponsor or its counsel.

The Trust may, in its discretion, suspend the right of creation or

redemption or may postpone the redemption or purchase settlement date, for (1) any period during which an emergency exists as a result

of which the fulfillment of a purchase order or the redemption distribution is not reasonably practicable, or (2) such other period as

the Sponsor determines to be necessary for the protection of the Shareholders of the Trust or if it is not feasible for Shares to be delivered

or the redemption distribution to be made.

In addition, the Trust may reject a redemption order if the order is not in proper form as

described in the Authorized Participant Agreement or if the fulfillment of the order might be unlawful as determined by the Sponsor or

Any such postponement, suspension or rejection could adversely affect a redeeming Authorized Participant.

Suspension of creation privileges may adversely impact how the Shares are traded and arbitraged on the secondary market, which could cause

them to trade at levels materially different (premiums and discounts) from the fair value of their underlying holdings.

Suspension of creation

privileges may adversely impact how the Shares are traded and arbitraged on the secondary market, which could cause them to trade at levels

materially different (premiums and discounts) from the fair value of their underlying holdings.

Shareholders may be adversely affected by an overstatement or

understatement of the NAV calculation of the Trust due to the valuation method employed on the date of the NAV calculation.

In certain circumstances, the Trust’s bitcoin

investments may be valued using techniques other than reliance on the price established by the Reference Rate.

The value established by

using the Reference Rate may be different from what would be produced through the use of another methodology.

Bitcoin or other digital

asset investments that are valued using techniques other than those employed by the Reference Rate, including bitcoin investments that

are “fair valued,” may be subject to greater fluctuation in their value from one day to the next than would be the case if

market-price valuation techniques were used.

In certain circumstances, the Trust’s bitcoin investments may

be valued using techniques other than reliance on the price established by the Reference Rate.

The value established by using the Reference

Rate may be different from what would be produced through the use of another methodology.

Bitcoin or other digital asset investments that

are valued using techniques other than those employed by the Reference Rate, including bitcoin investments that are “fair valued,”

may be subject to greater fluctuation in their value from one day to the next than would be the case if market-price valuation techniques

The liability of the Sponsor and the Trustee is limited, and

the value of the Shares will be adversely affected if the Trust is required to indemnify the Trustee or the Sponsor.

Under the Trust Agreement, the Trustee and the Sponsor

are not liable, and have the right to be indemnified, for any liability or expense incurred absent willful misconduct on the part of the

Trustee or the Sponsor or breach by the Sponsor of the Trust Agreement, as the case may be.

As a result, the Sponsor may require the assets

of the Trust to be sold in order to cover losses or liability suffered by it or by the Trustee.

Any sale of that kind would reduce the

NAV of the Trust and the value of its Shares.

Under the Trust Agreement, the Trustee and the Sponsor are not liable,

and have the right to be indemnified, for any liability or expense incurred absent willful misconduct on the part of the Trustee or the

Sponsor or breach by the Sponsor of the Trust Agreement, as the case may be.

As a result, the Sponsor may require the assets of the Trust

to be sold in order to cover losses or liability suffered by it or by the Trustee.

Any sale of that kind would reduce the NAV of the Trust

and the value of its Shares.

Extraordinary expenses resulting from unanticipated events may

become payable by the Trust, adversely affecting an investment in the Shares.

Extraordinary expenses of the Trust (for example,

expenses relating to litigation) are not assumed by the Sponsor and are instead borne by the Trust and paid through the sale of the Trust’s

Because the Trust does not generate any income, every time that it delivers bitcoins to the Sponsor for the Sponsor Fee or sells

bitcoins for expenses such as extraordinary expenses, the number of bitcoins represented by each Share will gradually decrease over time.

In addition, the Sponsor may, in its sole discretion, increase the Sponsor Fee or decrease the Sponsor-paid expenses which could result

in a greater decline in the number of bitcoins that the Trust holds.

Such changes could occur if the expenses of the Trust materially

For example, while the current Sponsor Fee is a unitary fee in which the Sponsor agrees to pay all the fee of the Trust’s

service providers (except for extraordinary expenses), the Sponsor may unwind part of this unitary fee and have a service providers’

Extraordinary expenses of the Trust (for example, expenses relating

to litigation) are not assumed by the Sponsor and are instead borne by the Trust and paid through the sale of the Trust’s bitcoins.

Because the Trust does not generate any income, every time that it delivers bitcoins to the Sponsor for the Sponsor Fee or sells bitcoins

for expenses such as extraordinary expenses, the number of bitcoins represented by each Share will gradually decrease over time.

the Sponsor may, in its sole discretion, increase the Sponsor Fee or decrease the Sponsor-paid expenses which could result in a greater

decline in the number of bitcoins that the Trust holds.

Such changes could occur if the expenses of the Trust materially increase.

example, while the current Sponsor Fee is a unitary fee in which the Sponsor agrees to pay all the fee of the Trust’s service providers

(except for extraordinary expenses), the Sponsor may unwind part of this unitary fee and have a service providers’ ( e.g.

custodian’s fee) charged directly to the Trust.

In that case, the Sponsor would provide 60 days’ advance notice

to Shareholders via a posting on the Trust’s website, prospectus supplement, post-effective amendment, through a current report

on Form 8-K or in the Trust’s annual or quarterly reports.

In that case, the Sponsor would provide 60 days’ advance notice to Shareholders

via a posting on the Trust’s website, prospectus supplement, post-effective amendment, through a current report on Form 8-K or in

the Trust’s annual or quarterly reports.

Third parties may infringe upon or otherwise violate intellectual

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significant costs and diverted attention.

It is possible that third parties might utilize the

Trust’s intellectual property or technology, including the use of its business methods and trademarks, without permission.

the Trust may not have adequate resources to implement procedures for monitoring unauthorized uses of their trademarks, proprietary software

and other technology.

Also, third parties may independently develop business methods, trademarks or proprietary software and other technology

similar to that of the Trust or claim that the Trust has violated their intellectual property rights, including their copyrights, trademark

rights, trade names, trade secrets and patent rights.

As a result, the Trust may have to litigate in the future to protect its trade secrets,

determine the validity and scope of other parties’ proprietary rights, defend itself against claims that it has infringed or otherwise

violated other parties’ rights, or defend itself against claims that its rights are invalid.

Any litigation of this type, even if

the Trust is successful and regardless of the merits, may result in significant costs, divert its resources from the Trust, or require

it to change its proprietary software and other technology or enter into royalty or licensing agreements.

It is possible that third parties might utilize the Trust’s intellectual

property or technology, including the use of its business methods and trademarks, without permission.

However, the Trust may not have

adequate resources to implement procedures for monitoring unauthorized uses of their trademarks, proprietary software and other technology.

Also, third parties may independently develop business methods, trademarks or proprietary software and other technology similar to that

of the Trust or claim that the Trust has violated their intellectual property rights, including their copyrights, trademark rights, trade

names, trade secrets and patent rights.

As a result, the Trust may have to litigate in the future to protect its trade secrets, determine

the validity and scope of other parties’ proprietary rights, defend itself against claims that it has infringed or otherwise violated

other parties’ rights, or defend itself against claims that its rights are invalid.

Any litigation of this type, even if the Trust

is successful and regardless of the merits, may result in significant costs, divert its resources from the Trust, or require it to change

its proprietary software and other technology or enter into royalty or licensing agreements.

Due to the increased use of technologies, intentional and unintentional

cyber-attacks pose operational and information security risks.

With the increased use of technologies such as the

internet and the dependence on computer systems to perform necessary business functions, the Trust is susceptible to operational and information

security risks.

With the increased use of technologies such as the internet and the

dependence on computer systems to perform necessary business functions, the Trust is susceptible to operational and information security

In general, cyber incidents can result from deliberate attacks or unintentional events.

Cyber-attacks include, but are

not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting

data, or causing operational disruption.

Cyber-attacks may also be carried out in a manner that does not require gaining unauthorized

access, such as causing denial-of-service attacks on websites.

Cyber security failures or breaches of one or more of the Trust’s

service providers (including, but not limited to, the Sponsor, Trust Administrator, Transfer Agent, the Bitcoin Custodian and the Cash

Custodian), as well as Authorized Participants and market makers, have the ability to cause disruptions and impact business operations,

potentially resulting in financial losses, the inability of the Shareholders to transact business, violations of applicable privacy and

other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, and/or additional compliance

In addition, substantial costs may be incurred in

order to prevent any cyber incidents in the future.

Cyber-attacks include, but are not limited

to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data,

or causing operational disruption.

Cyber-attacks may also be carried out in a manner that does not require gaining unauthorized access,

such as causing denial-of-service attacks on websites.

Cyber security failures or breaches of one or more of the Trust’s service

providers (including, but not limited to, the Sponsor, Trust Administrator, Transfer Agent, the Bitcoin Custodian and the Cash Custodian),

as well as Authorized Participants and market makers, have the ability to cause disruptions and impact business operations, potentially

resulting in financial losses, the inability of the Shareholders to transact business, violations of applicable privacy and other laws,

regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, and/or additional compliance costs.

In addition, substantial costs may be incurred in order to prevent

any cyber incidents in the future.

The Trust and its Shareholders could be negatively impacted as a result.

Trust has established business continuity plans, there are inherent limitations in such plans.

While the Trust has established

business continuity plans, there are inherent limitations in such plans.

The Trust and its service providers are subject to certain operational

The Trust and its service providers, including the

Sponsor, Trust Administrator, Transfer Agent, Bitcoin Custodian and Cash Custodian (as well as Authorized Participants and market makers)

may experience disruptions that arise from human error, processing and communications errors, counterparty or third-party errors, or technology

or systems failures, any of which may have an adverse impact on the Trust.

Although the Trust and its service providers seek to mitigate

these operational risks through their internal controls and operational risk management processes, these measures may not identify or

may be inadequate to address all such risks.

The Trust and its service providers, including the Sponsor, Trust Administrator,

Transfer Agent, Bitcoin Custodian and Cash Custodian (as well as Authorized Participants and market makers) may experience disruptions

that arise from human error, processing and communications errors, counterparty or third-party errors, or technology or systems failures,

any of which may have an adverse impact on the Trust.

Although the Trust and its service providers seek to mitigate these operational

risks through their internal controls and operational risk management processes, these measures may not identify or may be inadequate

to address all such risks.

The Trust Agreement includes a provision that restricts the right

of a beneficial owner of a statutory trust from bringing a derivative action.

Under Delaware law, the right of a beneficial owner

of a statutory trust (such as a Shareholder of the Trust) to bring a derivative action ( i.e.

, to initiate a lawsuit in the name

of a the statutory trust in order to assert a claim belonging to the statutory trust against a fiduciary of the statutory trust or against

a third-party when the statutory trust’s management has refused to do so) may be restricted by the terms of the governing instrument

of the statutory trust.

The Trust Agreement provides that in addition to any other requirements of applicable law, no Shareholder shall

have the right, power or authority to bring or maintain a derivative action, suit or other proceeding on behalf of the Trust unless two

or more Shareholders who (i) are not affiliates of one another and (ii) collectively hold at least 10% of the outstanding Shares join

in the bringing or maintaining of such action, suit or other proceeding.

Due to this additional requirement, a Shareholder

attempting to bring or maintain a derivative action in the name of the Trust will be required to locate at least one other Shareholder

with which it is not affiliated and together have sufficient Shares to meet the 10% threshold based on the number of Shares outstanding

on the date the claim is brought and thereafter throughout the duration of the action, suit or proceeding.

This may be difficult and may

result in increased costs to a Shareholder attempting to seek redress in the name of the Trust in court.

Moreover, if Shareholders bringing

a derivative action, suit or proceeding pursuant to this provision of the Trust Agreement do not hold 10% of the outstanding Shares on

the date such an action, suit or proceeding is brought, or such Shareholders are unable to maintain Share ownership meeting the 10% threshold

throughout the duration of the action, suit or proceeding, such Shareholders’ derivative action may be subject to dismissal.

a result, the Trust Agreement limits the likelihood that a Shareholder will be able to successfully assert a derivative action in the

name of the Trust, even if such Shareholder believes that he or she has a valid derivative action, suit or other proceeding to bring on

behalf of the Trust.

Under Delaware law, the right of a beneficial owner of a statutory

trust (such as a Shareholder of the Trust) to bring a derivative action ( i.e.

, to initiate a lawsuit in the name of a the statutory

trust in order to assert a claim belonging to the statutory trust against a fiduciary of the statutory trust or against a third-party

when the statutory trust’s management has refused to do so) may be restricted by the terms of the governing instrument of the statutory

The Trust Agreement provides that in addition to any other requirements of applicable law, no Shareholder shall have the right,

power or authority to bring or maintain a derivative action, suit or other proceeding on behalf of the Trust unless two or more Shareholders

who (i) are not affiliates of one another and (ii) collectively hold at least 10% of the outstanding Shares join in the bringing or maintaining

of such action, suit or other proceeding.

Due to this additional requirement, a Shareholder attempting to bring

or maintain a derivative action in the name of the Trust will be required to locate at least one other Shareholder with which it is not

affiliated and together have sufficient Shares to meet the 10% threshold based on the number of Shares outstanding on the date the claim

is brought and thereafter throughout the duration of the action, suit or proceeding.

This may be difficult and may result in increased

costs to a Shareholder attempting to seek redress in the name of the Trust in court.

Moreover, if Shareholders bringing a derivative action,

suit or proceeding pursuant to this provision of the Trust Agreement do not hold 10% of the outstanding Shares on the date such an action,

suit or proceeding is brought, or such Shareholders are unable to maintain Share ownership meeting the 10% threshold throughout the duration

of the action, suit or proceeding, such Shareholders’ derivative action may be subject to dismissal.

As a result, the Trust Agreement

limits the likelihood that a Shareholder will be able to successfully assert a derivative action in the name of the Trust, even if such

Shareholder believes that he or she has a valid derivative action, suit or other proceeding to bring on behalf of the Trust.

Pandemics and other public health crises could have a material

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What changed 10-K

Item 1A. Risk Factors