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Item 2. Management’s Discussion and Analysis

2026-05-06 compared with 2025-11-07 · 56 added, 63 removed, 76 unchanged (61% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read together with, and is qualified in its entirety by reference to, our unaudited financial statements and related notes included elsewhere in this Quarterly Report, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).

The following discussion may contain forward-looking statements based on assumptions we believe to be reasonable.

Our actual results could differ materially from those discussed in these forward-looking statements.

This information should be read in conjunction with the financial statements and notes to financial statements included in Item 1 of Part I of this Form 10‑Q.

The discussion and analysis that follows may contain statements that relate to future events or future performance.

In some cases, such forward‑looking statements can be identified by terminology such as “may,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or the negative of these terms or other comparable terminology.

These statements are only predictions.

Actual events or results may differ materially.

These statements are based upon certain assumptions and analyses made by the Sponsor on the basis of its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances.

Whether or not actual results and developments will conform to the Sponsor’s expectations and predictions, however, is subject to a number of risks and uncertainties, including the special considerations discussed below, general economic, market and business conditions, changes in laws or regulations, including those concerning taxes, made by governmental authorities or regulatory bodies, and other world economic and political developments.

Although the Sponsor does not make forward-looking statements unless it believes it has a reasonable basis for doing so, the Sponsor cannot guarantee their accuracy.

Except as required by applicable disclosure laws, neither the Trust nor the Sponsor is under a duty to update any of the forward-looking statements to conform such statements to actual results or to a change in the Sponsor’s expectations or predictions.

Overview of the Trust

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(the “Exchange”).

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 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 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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EST provides an opportunity for the Sponsor to algorithmically detect, flag, investigate, and correct unusual pricing should it occur.

The Sponsor has established a Valuation Committee to carry out the day-to-day fair valuation responsibilities and has adopted policies and procedures to govern the fair valuation process and the activities of the Valuation Committee.

If the Valuation Committee determines in good faith that the Index does not reflect an accurate bitcoin price, then the Valuation Committee instructs the Administrator to employ an alternative method to determine the fair value of the Trust’s assets.

In determining an alternative fair value method, the Valuation Committee generally considers such criteria as observable market-based inputs, including market quotations and last sale information from third-party pricing services and/or trading platforms on which bitcoin are traded.

The Valuation Committee’s selection of third-party pricing services used considers the qualifications, experience, and history of the pricing services and whether their valuation methodologies and procedures are reasonably designed to produce prices that reflect fair value under the prevailing market conditions.

The Sponsor has established a Valuation and Liquidity Committee to carry out the day-to-day fair valuation responsibilities and has adopted policies and procedures to govern the fair valuation process and the activities of the Valuation and Liquidity Committee.

If the Valuation and Liquidity Committee determines in good faith that the Index does not reflect an accurate bitcoin price, then the Valuation and Liquidity Committee instructs the Administrator to employ an alternative method to determine the fair value of the Trust’s assets.

In determining an alternative fair value method, the Valuation and Liquidity Committee generally considers such criteria as observable market-based inputs, including market quotations and last sale information from third-party pricing services and/or trading platforms on which bitcoin are traded.

The Valuation and Liquidity Committee’s selection of third-party pricing services used considers the qualifications, experience, and history of the pricing services and whether their valuation methodologies and procedures are reasonably designed to produce prices that reflect fair value under the prevailing market conditions.

In addition, in order to provide updated information relating to the Trust for use by Shareholders and market professionals, a third-party financial data provider will calculate and disseminate throughout the core trading session on each trading day an updated intraday indicative value (“IIV”).

The IIV will be calculated based on the Trust’s bitcoin holdings and any other assets expected to comprise that day’s Trust’s NAV calculation.

The IIV is calculated based on the Trust’s bitcoin holdings and any other assets expected to comprise that day’s Trust’s NAV calculation.

The third-party financial data provider will use the Blockstream Crypto Data Feed Streaming Level 1 as the pricing source for the spot bitcoin.

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EST on the Trust’s financial statement measurement date.

Results of Operations

The Trust’s commencement of operations was January 11, 2024.

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”).

The Quarter Ended September 30, 2025

The Trust’s net assets increased from approximately $21.6 billion as of June 30, 2025 to $23.3 billion as of September 30, 2025.

The change in the Trust’s net assets primarily resulted from an increase in outstanding Shares, which rose from 230,728,476 as of June 30, 2025 to 233,678,476 as of September 30, 2025.

This was as a result of 29,825,000 Shares (1,193 Baskets) being created and 26,875,000 Shares (1,075 Baskets) being redeemed during the three months ended September 30, 2025, coupled with an increase in the price of bitcoin, which rose 6.53% from $107,221.67 as of June 30, 2025 to $114,223.01 as of September 30, 2025.

The Trust’s NAV per Share increased 6.00% from $93.83 as of June 30, 2025, to $99.46 as of September 30, 2025.

The Trust ’s NAV per Share of $106.80 at August 13, 2025, was the highest during the three months ended September 30, 2025, compared with a low of $92.12 at July 1, 2025.

The quantity of bitcoin owned by the Trust and held by the bitcoin custodian increased from 201,347 as of June 30, 2025 to 203,794 on September 30, 2025.

The increase in quantity is the result of the net increase from capital share transactions.

The net increase in net assets resulting from operations for the three months ended September 30, 2025, was $1.4 billion, primarily resulting from a net change in unrealized appreciation on investment in bitcoin of $1.4 billion.

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 primarily 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, coupled with 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.

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 167,463 on June 30, 2024 to 180,345 on September 30, 2024.

The increase in quantity is the result of the net increase from capital share transactions.

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 Nine Months Ended September 30, 2025

The Trust’s net assets increased from approximately $18.8 billion as of December 31, 2024 to $23.3 billion as of September 30, 2025.

The change in the Trust’s net assets primarily resulted from an increase in outstanding Shares, which rose from 230,678,476 as of December 31, 2024 to 233,678,476 as of September 30, 2025.

This was as a result of 89,400,000 Shares (3,576 Baskets) being created and 86,400,000 Shares (3,456 Baskets) being redeemed during the nine months ended September 30, 2025, coupled with an increase in the price of bitcoin, which rose 22.34% from $93,365.36 as of December 31, 2024 to $114,223.01 as of September 30, 2025.

The Trust’s NAV per Share increased 21.59% from $81.80 as of December 31, 2024, to $99.46 as of September 30, 2025.

The Trust ’s NAV per Share of $106.80 at August 13, 2025, was the highest during the nine months ended September 30, 2025, compared with a low of $66.97 at April 8, 2025.

The quantity of bitcoin owned by the Trust and held by the bitcoin custodian increased from 201,556 as of December 31, 2024 to 203,794 on September 30, 2025.

The increase in quantity resulted from purchases or acquisitions of bitcoin, partially offset by bitcoin transferred to pay the Sponsor fee and sold for the redemptions of Shares, during the nine months ended September 30, 2025.

The net increase in net assets resulting from operations for the nine months ended September 30, 2025, was $3.9 billion, primarily resulting from a net change in unrealized appreciation on investment in bitcoin of approximately $4.2 billion and a net realized loss of approximately $246.9 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 primarily 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, coupled with an increase in the price of bitcoin, which rose 38.56% from $45,956.16 on January 11, 2024 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.

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 180,345 on September 30, 2024.

The increase in quantity is the result of the net increase from capital share transactions.

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 approximately $0.3 billion from the sale of the investment in bitcoin for the redemption of Shares.

The Quarter Ended March 31, 2026

The Trust’s net assets decreased from approximately $17.6 billion as of December 31, 2025 to $12.8 billion as of March 31, 2026.

The change in the Trust’s net assets primarily resulted from an decrease in outstanding Shares, which fell from 231,403,476 as of December 31, 2025 to 216,003,476 as of March 31, 2026.

This was as a result of 28,700,000 Shares (1,148 Baskets) being created and 44,100,000 Shares (1,764 Baskets) being redeemed during the three months ended March 31, 2026, coupled with an decrease in the price of bitcoin, which fell 22.10% from $87,463.03 as of December 31, 2025 to $68,129.64 as of March 31, 2026.

The NAV per Share decreased 22.15% from $76.21 as of December 31, 2025 to $59.33 as of March 31, 2026.

The Trust’s NAV per Share decreased 22.38% from $76.10 as of December 31, 2025, to $59.07 as of March 31, 2026.

The Trust ’s NAV per Share of $85.01 at January 14, 2026, was the highest during the three months ended March 31, 2026, compared with a low of $55.43 at February 5, 2026.

The quantity of bitcoin owned by the Trust and held by the bitcoin custodian decreased from 201,684 as of December 31, 2025 to 188,144 on March 31, 2026.

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, 2026, was $3.7 billion, primarily resulting from a net change in unrealized depreciation on investment in bitcoin of $3.8 billion and a net realized loss of $0.1 billion from the sale of the investment in bitcoin for the redemption of Shares, partially offset by a net realized gain of $0.2 billion from the distribution 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 NAV per Share decreased 11.20% from $81.56 as of December 31, 2024 to $72.42 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 as of December 31, 2024 to 196,933 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 $0.2 billion from the sale of the investment in bitcoin for the redemption of Shares.

Cash Resources and Liquidity

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Selected Operating Data

September 30, 2025

March 31, 2026

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, 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 September 30, 2025.

September 30, 2025

Index price (2)

March 31, 2026

NAV per Share (3)

Adjustment to NAV per Share

Trust’s NAV per Share (4)

(1) The Trust performed an assessment of the principal market at 11:59:59 p.m., EST, on March 31, 2026.

(2) Index Price as represented by the Index as of 4:00 p.m., EST, on the last business day of the period.

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.

(3) 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, 2026.

(4) 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.

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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 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 September 30, 2025, the Trust’s total value of bitcoin based on the Index Price (non-GAAP methodology) was $23,246,550,892 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 $23,314,485,757.

As of 4:00 p.m., EST, on the last business day of the three months ended March 31, 2026, the Trust’s total value of bitcoin based on the Index Price (non-GAAP methodology) was $12,761,432,156, a difference of $56,766,879 to the GAAP value, which was $12,818,199,035, 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 (non-GAAP methodology) was $12,757,174,452, a difference of $61,024,583 to the GAAP value, which was $12,818,199,035.

December 31, 2025

Price of bitcoin on principal market (1)

Index price (2)

December 31, 2025

NAV per Share (3)

Adjustment to NAV per Share

Trust’s NAV per Share (4)

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

(2) Index Price as represented by the Index as of 4:00 p.m., EST, on the last business day of the period.

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.

(3) 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, 2025.

December 31, 2024

Index price (3)

Trust’s NAV per Share (3)

(4) 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.

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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.

As of 4:00 p.m., EST, on the last business day of the year ended December 31, 2025, the Trust’s total value of bitcoin based on the Index Price (non-GAAP methodology) was $17,612,442,661, a difference of $27,483,529 to the GAAP value, which was $17,639,926,190, 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 (non-GAAP methodology) was $17,656,256,573, a difference of $16,330,383 to the GAAP value, which was $17,639,926,190.

Analysis of Price Movements

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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 during the nine months ended September 30, 2025.

During the nine months ended September 30, 2025, the Index Price has ranged from $76,713.07 on April 8, 2025, to $122,448.50 on August 13, 2025.

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, 2026.

During the three months ended March 31, 2026, the Index Price has ranged from $63,632.21 on February 5, 2026, to $97,568.00 on January 14, 2026.

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 nine months ended September 30, 2025, the 11:59:59 p.m.

EST market price of bitcoin, as reported on the Trust’s principal market, has ranged from $75,009.00 on April 8, 2025, to $123,396.86 on August 13, 2025.

During the three months ended March 31, 2026, the 11:59:59 p.m.

EST market price of bitcoin, as reported on the Trust’s principal market, has ranged from $63,351.99 on February 23, 2026, to $96,313.99 on January 14, 2026.

Shares trade in the secondary market on the Exchange.

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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 during the nine months ended September 30, 2025.

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, 2026.

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