What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-09 compared with 2024-11-13 · 46 added, 35 removed, 78 unchanged (51% of the section changed)

6 unchanged sentences

(the “Exchange”).

The Trust’s investment objective is to seek to track the performance of bitcoin, as measured by the performance of the Fidelity Bitcoin Reference Rate (the “Index”), adjusted for the Trust’s expenses and other liabilities.

The Trust’s investment objective is to seek to track the performance of bitcoin, as measured by the performance of Fidelity Bitcoin Reference Rate (“the Index”), adjusted for the Trust’s expenses and other liabilities.

The Index is constructed using bitcoin price feeds from eligible bitcoin spot markets and a volume-weighted median price (“VWMP”) methodology, calculated every 15 seconds based on VWMP spot market data over rolling sixty-minute increments.

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Except in limited circumstances, Shareholders have no voting rights under the Trust Agreement.

Valuation of Bitcoin and Computation of Net Asset Value

Valuation of Bitcoin and Computation of Net Asset Value ( “NAV”)

For purposes of calculating the Trust’s net asset value (“Trust’s NAV”) per Share, the Trust’s holdings of bitcoin are valued using the same methodology as used to calculate the Index.

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The Blockstream Crypto Data Feed Streaming Level 1 calculates an average of current bitcoin price levels of the bitcoin trading platforms that are available on its feed.

The bitcoin trading platforms included in the Blockstream Crypto Data Feed Streaming Level 1 include Bitflyer, Bitfinex, Binance US, Bitso, Bitstamp, BTSE, CEX IO, Exmo, Gemini, itBit, LMAX Digital and OK Coin.

The Trust will provide an IIV per Share updated every 15 seconds, as calculated by the Exchange or a third-party financial data provider during the Exchange’s regular trading hours of 9:30 a.m.

13 unchanged sentences

The Trust had no operations prior to January 11, 2024, other than matters relating to its organization and the registration of the Shares under the Securities Act of 1933 (the “1933 Act”).

Effective January 9, 2024, the Trust and the Sponsor entered into a Fee Waiver Agreement in which the Sponsor agreed to waive the entirety of the Sponsor Fee (the “Waiver”) through July 31, 2024 (the “Initial Waiver Period”).

Effective July 31, 2024, the Fee Waiver Agreement ended.

The Quarter Ended September 30, 2024

The Trust’s net assets increased from $10.6 billion on June 30, 2024 to $11.5 billion on September 30, 2024.

The change in the Trust’s net assets resulted from an increase in outstanding Shares, which rose from 191,500,000 on June 30, 2024 to 206,275,000 on September 30, 2024 as a result of 32,675,000 Shares (1,307 Baskets) being issued and 17,900,000 Shares (716 Baskets) being redeemed during the quarter aided by an increase in the price of bitcoin, which rose 0.49% from $63,369.30 on June 30, 2024 to $63,677.63 on September 30, 2024.

The Trust’s NAV per Share increased 5.24% from $52.68 on June 28, 2024 (last business day) to $55.44 on September 30, 2024 (last business day).

The Trust ’s NAV per Share of $59.36 at July 26, 2024 was the highest during the quarter, compared with a low of $46.43 at August 5, 2024.

During the quarter ended September 30, 2024, the quantity of bitcoin owned by the Trust and held by the bitcoin custodian increased from 167,462.80769789 on June 30, 2024 to 180,344.62381900 on September 30, 2024.

The increase in quantity resulted from using net cash proceeds received from the increase in capital transactions to purchase bitcoin.

The net increase in net assets resulting from operations for the quarter ended September 30, 2024 was $41.0 million, driven by a net change in unrealized appreciation of investment in bitcoin of $222.3 million and a net realized loss of $176.4 million from the sale of the investment in bitcoin for the redemption of Shares.

The Period Ended September 30, 2024

The Trust’s net assets increased from $40 on December 31, 2023 to $11.5 billion on September 30, 2024.

The change in the Trust’s net assets resulted from an increase in outstanding Shares, which rose from 1 on December 31, 2023 to 206,275,000 on September 30, 2024 as a result of 238,625,000 Shares (9,545 Baskets) being issued and 32,350,001 Shares (1,294 Baskets) being redeemed during the period January 11, 2024 (commencement of operations) through September 30, 2024 and an increase in the price of bitcoin, which rose 38.56% from $45,956.16 on January 11, 2024 (commencement of operations) to $63,677.63 on September 30, 2024.

The Trust’s NAV per Share increased 38.60% from $40.00 on December 31, 2023 to $55.44 on September 30, 2024 (last business day).

The Trust ’s NAV per Share of $63.97 at March 13, 2024 was the highest during the period, compared with a low of $34.28 at January 23, 2024.

During the period ended September 30, 2024, the quantity of bitcoin owned by the Trust and held by the bitcoin custodian increased from 0 on December 31, 2023 to 180,344.62381900 on September 30, 2024.

The increase in quantity resulted from using net cash proceeds received from the increase in capital transactions to purchase bitcoin.

The net increase in net assets resulting from operations for the period ended September 30, 2024 was $1.5 billion, driven by a net change in unrealized appreciation on investment in bitcoin of $1.8 billion and a net realized loss of $294.6 million from the sale of the investment in bitcoin for the redemption of Shares.

The Quarter Ended March 31, 2025

The Trust’s net assets decreased from approximately $18.8 billion as of December 31, 2024 to $16.3 billion as of March 31, 2025.

The change in the Trust’s net assets resulted from a decrease in outstanding Shares, which fell from 230,678,476 as of December 31, 2024 to 225,528,476 as of March 31, 2025.

This was as a result of 31,600,000 Shares (1,264 Baskets) being created and 36,750,000 Shares (1,470 Baskets) being redeemed during the three months ended March 31, 2025, coupled with a decrease in the price of bitcoin, which fell 11.15% from $93,365.36 as of December 31, 2024 to $82,956.00 as of March 31, 2025.

The Trust’s NAV per Share decreased 11.54% from $81.80 as of December 31, 2024, to $72.36 as of March 31, 2025.

The Trust ’s NAV per Share of $92.97 at January 21, 2025, was the highest during the three months ended March 31, 2025, compared with a low of $68.74 at March 10, 2025.

The quantity of bitcoin owned by the Trust and held by the bitcoin custodian decreased from 201,556.08413894 as of December 31, 2024 to 196,932.77464322 on March 31, 2025.

The decrease in quantity resulted from net redemptions of Shares during the quarter which corresponded to net sales of bitcoin.

The net decrease in net assets resulting from operations for the three months ended March 31, 2025, was $2.2 billion, primarily resulting from a net change in unrealized depreciation on investment in bitcoin of $2.0 billion and a net realized loss of $238.3 million from the sale of the investment in bitcoin for the redemption of Shares.

The Quarter Ended March 31, 2024

The Trust’s net assets increased from $40 as of December 31, 2023 to $10.2 billion as of March 31, 2024.

The change in the Trust’s net assets resulted from an increase in outstanding Shares, which rose from 1 as of December 31, 2023 to 165,475,000 as of March 31, 2024 as a result of 165,500,000 Shares (6,620 Baskets) being created and 25,001 Shares (1 Basket) being redeemed during the quarter and an increase in the price of bitcoin, which rose 53.62% from $45,956.16 as of January 11, 2024 (inception) to $70,596.99 as of March 31, 2024.

The Trust’s NAV per Share increased 54.75% from $40.00 as of December 31, 2023 to $61.90 as of March 28, 2024 (last business day).

The Trust’s NAV per Share of $63.97 at March 13, 2024 was the highest during the quarter, compared with a low of $34.28 at January 23, 2024.

During the quarter ended March 31, 2024, the quantity of bitcoin owned by the Trust and held by the bitcoin custodian increased from none as of December 31, 2023 to 144,704.48094252 as of March 31, 2024.

The increase in quantity resulted from using cash proceeds received from creation transactions to purchase bitcoin.

The net increase in net assets resulting from operations for the quarter ended March 31, 2024 was $2.6 billion, resulting from an unrealized gain on investment in bitcoin of $2.6 billion and a net realized loss of $0.1 million from the sale of the investment in bitcoin for the redemption of Shares.

Cash Resources and Liquidity

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In exchange for the Sponsor Fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust.

The Sponsor contractually waived the Sponsor Fee until July 31, 2024.

On August 1, 2024, the Sponsor Fee began accruing at an annual rate of 0.25% of the Trust’s Bitcoin Holdings.

Off Balance Sheet Arrangements and Contractual Obligations

4 unchanged sentences

Selected Operating Data

September 30, 2024

March 31, 2025

Price of bitcoin on principal market (1)

NAV per Share (2)

(1) The Trust performed an assessment of the principal market at 11:59:59 p.m., EST, on September 30, 2024.

(2) The NAV per Share was calculated using the fair value of bitcoin based on the principal market price at 11:59:59 p.m., EST, on September 30, 2024.

September 30, 2024

(1) The Trust performed an assessment of the principal market at 11:59:59 p.m., EST, on March 31, 2025.

(2) The NAV per Share was calculated using the fair value of bitcoin based on the principal market price at 11:59:59 p.m., EST, on March 31, 2025.

March 31, 2025

(Last Business Day)

1 unchanged sentence

Trust’s NAV per Share (3)

(3) The Trust’s NAV per Share is derived from the Index Price as represented by the Index as of 4:00 p.m., EST, on the last business day of the quarter.

(3) The Trust’s NAV per Share is derived from the Index Price as represented by the Index as of 4:00 p.m., EST, on the last business day of the period.

The Trust’s NAV per Share is calculated using a non-GAAP methodology.

Refer to the “Overview of the Trust” and “Valuation of Bitcoin and Computation of Net Asset Value” sections of Item 2 herein for a description of the Index methodology and calculation of the Trust’s NAV per Share.

The bitcoin spot markets included in the Index as of the last business day of the quarter were Bitstamp, Coinbase, Gemini, itBit, Kraken, and LMAX Digital.

As of 4:00 p.m., EST, on the last business day of the quarter ended September 30, 2024, the Trust’s total value of bitcoin based on the Index Price (non-GAAP methodology) was $11,438,263,987 and the total market value of the Trust’s bitcoin based on the price of a bitcoin at 4:00 p.m., EST, in the principal market was $11,445,528,268.

The bitcoin spot markets included in the Index as of the last business day of the period were Bitstamp, Coinbase, Crypto.com, Gemini, Kraken, and LMAX Digital.

As of 4:00 p.m., EST, on the last business day of the quarter ended March 31, 2025, the Trust’s total value of bitcoin based on the Index Price (non-GAAP methodology) was $16,321,985,295 and the total market value of the Trust’s bitcoin based on the price of a bitcoin at 4:00 p.m., EST, in the principal market was $16,236,126,544.

December 31, 2024

Price of bitcoin on principal market (1)

NAV per Share (2)

(1) The Trust performed an assessment of the principal market at 11:59:59 p.m., EST, on December 31, 2024.

(2) The NAV per Share was calculated using the fair value of bitcoin based on the principal market price at 11:59:59 p.m., EST, on December 31, 2024.

December 31, 2024

(Last Business Day)

Index price (3)

Trust’s NAV per Share (3)

(3) The Trust’s NAV per Share is derived from the Index Price as represented by the Index as of 4:00 p.m., EST, on the last business day of the period.

The Trust’s NAV per Share is calculated using a non-GAAP methodology.

Refer to the “Overview of the Trust” and “Valuation of Bitcoin and Computation of Net Asset Value” sections of Item 7 herein for a description of the Index methodology and calculation of the Trust’s NAV per Share.

The bitcoin spot markets included in the Index as of the last business day of the period were Bitstamp, Coinbase, Gemini, itBit, Kraken, and LMAX Digital.

As of 4:00 p.m., EST, on the last business day of the quarter ended December 31, 2024, the Trust’s total value of bitcoin based on the Index Price (non-GAAP methodology) was $18,874,247,858 and the total market value of the Trust’s bitcoin based on the price of a bitcoin at 4:00 p.m., EST, in the principal market was $18,823,929,382.

Analysis of Price Movements

Investors should understand the relationship between the Index Price (non-GAAP measurement of the price of bitcoin), the Trust’s NAV per Share (non-GAAP measurement of the price of bitcoin affected by non-bitcoin net assets, such as the Sponsor Fee), FBTC’s market price per share, and bitcoin’s principal market price.

Investors should understand the relationship between the Index Price (non-GAAP measurement of the price of bitcoin), the Trust’s NAV per Share (non-GAAP measurement of the price of bitcoin affected by non-bitcoin net assets, such as the Sponsor Fee), the Trust’s market price per share, and bitcoin’s principal market price.

Investors should also be aware that past movements are not indicators of future movements.

Movements may be influenced by various factors, including, but not limited to, government regulation, security breaches experienced by service providers, as well as political and economic uncertainties around the world.

The following chart illustrates the movement in the Index Price, the principal market price, and the Trust’s NAV per Share from January 11, 2024 (commencement of operations) to September 30, 2024.

During the period from January 11, 2024 to September 30, 2024, the Index Price has ranged from $39,198.82 on January 23, 2024 to $73,153.50 on March 13, 2024.

The following chart illustrates the movement in the Index Price, the principal market price, and the Trust’s NAV per Share during the three months ended March 31, 2025.

During the three months ended March 31, 2025, the Index Price has ranged from $78,724.00 on March 10, 2025, to $106,443.00 on January 21, 2025.

The Sponsor has not observed a material difference between the Index Price and average prices from the constituent bitcoin spot markets individually or as a group.

During the period from January 11, 2024 to September 30, 2024, the market price of bitcoin, as reported on the Trust’s principal market, has ranged from $39,631.40 on January 23, 2024 to $73,308.46 on March 13, 2024.

During the three months ended March 31, 2025, the 11:59:59 p.m.

EST market price of bitcoin, as reported on the Trust’s principal market, has ranged from $79,488.02 on March 10, 2025, to $105,579.98 on January 21, 2025.

Shares trade in the secondary market on the Exchange.

1 unchanged sentence

The amount of the discount or premium in the trading price relative to the Trust’s NAV per Share may be influenced by various factors, including the number of Shareholders who seek to purchase or sell Shares in the secondary market and the liquidity of bitcoin.

The following chart sets out the historical closing prices for the Shares as reported by the Exchange and the Trust’s NAV per Share from January 11, 2024 to September 30, 2024 (last business day).

The following chart sets out the historical closing prices for the Shares as reported by the Exchange and the Trust’s NAV per Share during the three months ended March 31, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis