What changed in this filing

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Item 1. Financial Statements

2024-08-02 compared with 2024-05-03 · 113 added, 138 removed, 323 unchanged (44% of the section changed)

3 unchanged sentences

(Amounts in thousands, except Share and per Share amounts)

Investment in Bitcoin, at fair value (cost $ 4,001,652 and $ 7,016,906 as of March 31, 2024 and December 31, 2023, respectively)

June 30, 2024

December 31, 2023

Investment in Bitcoin, at fair value (cost $ 3,473,743 and $ 7,016,906 as of June 30, 2024 and December 31, 2023, respectively)

Sponsor's Fee payable, related party

Bitcoin payable, at fair value

Total liabilities

5 unchanged sentences

(Amounts in thousands, except quantity of Bitcoin and percentages)

March 31, 2024

Quantity of Bitcoin

% of Net Assets

June 30, 2024

Investment in Bitcoin

2 unchanged sentences

December 31, 2023

Quantity of Bitcoin

% of Net Assets

Investment in Bitcoin

4 unchanged sentences

(Amounts in thousands)

Three Months Ended

Three Months Ended June 30,

Six Months Ended June 30,

Investment income:

2 unchanged sentences

Net investment loss

Net realized and unrealized gain from:

Net realized and unrealized gain (loss) from:

Net realized gain on investment in Bitcoin sold to pay expenses

1 unchanged sentence

Net change in unrealized appreciation on investment in Bitcoin

Net realized and unrealized gain on investment

Net increase in net assets resulting from operations

Net realized and unrealized (loss) gain on investment

Net (decrease) increase in net assets resulting from operations

See accompanying notes to the unaudited financial statements.

2 unchanged sentences

(Amounts in thousands, except change in Shares outstanding)

Three Months Ended

Increase in net assets from operations:

Three Months Ended June 30,

Six Months Ended June 30,

(Decrease) increase in net assets from operations:

Net investment loss

2 unchanged sentences

Net change in unrealized appreciation on investment in Bitcoin

Net increase in net assets resulting from operations

Increase (decrease)

in net assets from capital share transactions:

Net (decrease) increase in net assets resulting from operations

(Decrease) in net assets from capital share transactions:

Shares issued

1 unchanged sentence

Net (decrease) in net assets resulting from capital share transactions

Total increase (decrease) in net assets from operations and capital share transactions

Total (decrease) increase in net assets from operations and capital share transactions

Beginning of period

End of period

Changes in Shares outstanding

Change in Shares outstanding:

Shares outstanding at beginning of period

9 unchanged sentences

Grayscale Bitcoin Trust (BTC) (the “Trust”) is a Delaware Statutory Trust that was formed on September 13, 2013 and commenced operations on September 25, 2013.

In general, the Trust holds Bitcoin (“ Bitcoin

”) and, from time to time, issues common units of fractional undivided beneficial interest (“Shares”) in exchange for Bitcoin.

In general, the Trust holds Bitcoin (“Bitcoin”) and, from time to time, issues common units of fractional undivided beneficial interest (“Shares”) in exchange for Bitcoin.

Prior to January 11, 2024, the redemption of Shares was not contemplated and the Trust did not operate a redemption program.

On January 10, 2024, the Securities and Exchange Commission (the “SEC”) approved an application under Rule 19b-4

of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) by NYSE Arca, Inc.

On January 10, 2024, the Securities and Exchange Commission (the “SEC”) approved an application under Rule 19b-4 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) by NYSE Arca, Inc.

(“NYSE Arca”) to list the Shares of the Trust, which began trading on NYSE Arca on January 11, 2024 (the “Uplisting Date”).

As if the date of this Quarterly Report, the Trust is an SEC reporting company with its Shares registered pursuant to Section 12(b) of the Exchange Act.

On January 10, 2024, in connection with the approval of the 19b-4

Application, the Sponsor authorized the commencement of a redemption program.

As of the date of this Quarterly Report, the Trust is an SEC reporting company with its Shares registered pursuant to Section 12(b) of the Exchange Act.

On January 10, 2024, in connection with the approval of the 19b-4 Application, the Sponsor authorized the commencement of a redemption program.

Effective January 11, 2024, the Trust creates and redeems Shares at such times and for such periods as determined by the Sponsor, but only in one or more whole Baskets.

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Because the Sponsor has now committed to causing the Trust to irrevocably abandon all Incidental Rights and IR Virtual Currency to which the Trust otherwise would become entitled in the future, and causing the Trust not to take any Affirmative Actions, the Trust will not receive any direct or indirect consideration for the Incidental Rights or IR Virtual Currency and thus the value of the Shares will not reflect the value of the Incidental Rights or IR Virtual Currency.

In addition, in the event the Sponsor seeks to change the Trust’s policy with respect to Incidental Rights or IR Virtual Currency, an application would need to be filed with the SEC by NYSE Arca seeking approval to amend its listing rules to permit the Trust to distribute the Incidental Rights or IR Virtual Currency in-kind

to an agent of the shareholders for resale by such agent.

Grayscale Investments, LLC (“Grayscale” or the “Sponsor”) acts as the Sponsor of the Trust and is a wholly owned subsidiary of Digital Currency Group, Inc.

The Sponsor is responsible for the day-to-day

administration of the Trust pursuant to the provisions of the Trust Agreement.

The Sponsor is responsible for the day-to-day administration of the Trust pursuant to the provisions of the Trust Agreement.

Grayscale is responsible for preparing and providing annual and quarterly reports on behalf of the Trust to investors and is also responsible for selecting and monitoring the Trust’s service providers.

2 unchanged sentences

GBAT), Grayscale Bitcoin Cash Trust (BCH) (OTCQX:

BCHG), Grayscale Chainlink Trust (LINK) (OTCQX:

BCHG), Grayscale Bitcoin Mini Trust (BTC) (NYSE Arca:

BTC), Grayscale Chainlink Trust (LINK) (OTCQX:

GLNK), Grayscale Decentraland Trust (MANA) (OTCQX:

MANA), Grayscale Ethereum Trust (ETH) (OTCQX:

MANA), Grayscale Ethereum Trust (ETH) (NYSE Arca:

ETHE), Grayscale Ethereum Classic Trust (ETC) (OTCQX:

ETCG), Grayscale Filecoin Trust (FIL) (OTCQB:

ETCG), Grayscale Ethereum Mini Trust (ETH) (NYSE Arca:

ETH), Grayscale Filecoin Trust (FIL) (OTCQB:

FILG), Grayscale Horizen Trust (ZEN) (OTCQX:

1 unchanged sentence

LTCN), Grayscale Livepeer Trust (LPT) (OTCQX:

GLIV), Grayscale Solana Trust (SOL) (OTCQX:

GSOL), Grayscale Stellar Lumens Trust (XLM) (OTCQX:

GLIV), Grayscale NEAR Trust (NEAR), Grayscale Solana Trust (SOL) (OTCQX:

GSOL), Grayscale Stacks Trust (STX), Grayscale Stellar Lumens Trust (XLM) (OTCQX:

GXLM), Grayscale Zcash Trust (ZEC) (OTCQX:

ZCSH), Grayscale Decentralized Finance (DeFi) Fund LLC (OTCQB:

ZCSH), Grayscale Decentralized AI Fund LLC, Grayscale Decentralized Finance (DeFi) Fund LLC (OTCQB:

DEFG), Grayscale Digital Large Cap Fund LLC (OTCQX:

GDLC), and Grayscale Smart Contract Platform Ex Ethereum (ETH) Fund LLC, each of which is an affiliate of the Trust.

The following investment products sponsored or managed by the Sponsor are also SEC reporting companies with their shares registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”):

Grayscale Bitcoin Cash Trust (BCH), Grayscale Ethereum Trust (ETH), Grayscale Ethereum Classic Trust (ETC), Grayscale Horizen Trust (ZEN), Grayscale Litecoin Trust (LTC), Grayscale Stellar Lumens Trust (XLM), Grayscale Zcash Trust (ZEC), and Grayscale Digital Large Cap Fund LLC.

GDLC), and Grayscale Smart Contract Platform Ex Ethereum (ETH) Fund LLC, each of which is an affiliate of the

The following investment products sponsored or managed by the Sponsor are SEC reporting companies with their shares registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”):

Grayscale Bitcoin Cash Trust (BCH), Grayscale Ethereum Classic Trust (ETC), Grayscale Horizen Trust (ZEN), Grayscale Litecoin Trust (LTC), Grayscale Stellar Lumens Trust (XLM), Grayscale Zcash Trust (ZEC), and Grayscale Digital Large Cap Fund LLC.

Prior to July 23, 2024, shares of the Grayscale Ethereum Trust (ETH) were also registered pursuant to Section 12(g) of the Exchange Act.

The following investment products sponsored by the Sponsor are SEC reporting companies with their shares registered pursuant to Section 12(b) of the Exchange Act:

Grayscale Ethereum Trust (ETH) (as of July 23, 2024), Grayscale Ethereum Mini Trust (ETH) (as of July 23, 2024), and Grayscale Bitcoin Mini Trust (BTC) (as of July 31, 2024).

Grayscale Advisors, LLC, a Registered Investment Advisor and an affiliate of the Sponsor, is the advisor to the Grayscale Future of Finance (NYSE Arca:

1 unchanged sentence

Authorized Participants of the Trust are the only entities who may place orders to create or redeem Baskets.

Grayscale Securities, LLC (“Grayscale Securities” or, in such capacity, an “Authorized Participant”), a registered broker-dealer and wholly owned subsidiary

of the Sponsor, was the only Authorized Participant from October 3, 2022 through January 10, 2024.

On or after January 10, 2024, the Sponsor, on behalf of the Trust, and the Transfer Agent entered into Participant Agreements with a number of unaffiliated Authorized Participants in connection with the approval of NYSE Arca’s application under Rule 19b-4

of the Exchange Act.

Grayscale Securities, LLC (“Grayscale Securities” or, in such capacity, an “Authorized Participant”), a registered broker-dealer and wholly owned subsidiary of the Sponsor, was the only Authorized Participant from October 3, 2022 through January 10, 2024.

In connection with the entry into the Participant Agreements, as of January 10, 2024, the Sponsor amended, solely, with respect to the Trust, the Participant Agreement, dated as of October 3, 2022, between the Sponsor and Grayscale Securities, to remove the Trust as an entity covered by the Agreement.

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and (4) make periodic reports to the Trust.

Effective January 11, 2024, the co-transfer

agent for the Trust (the “Co-Transfer

Agent”) is Continental Stock Transfer & Trust Company.

Effective January 11, 2024, the co-transfer agent for the Trust (the “Co-Transfer Agent”) is Continental Stock Transfer & Trust Company.

The administrator for the Trust (the “Administrator”) is BNY Mellon Asset Servicing, a division of The Bank of New York Mellon.

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(iv) review and file applicable marketing materials with FINRA and (v) maintain, reproduce and store applicable books and records.

On March 25, 2015, the Trust received notice that its Shares were qualified for public trading on the OTCQX U.S.

Marketplace of the OTC Markets Group Inc.

On March 25, 2015, the Trust received notice that its Shares were qualified for public trading on the OTCQX Best Market ® (“OTCQX”) of OTC Markets Group Inc.

Until January 10, 2024, the Trust’s trading symbol on OTCQX was “GBTC”.

On January 10, 2024, the SEC approved an application under Rule 19b-4

of the Exchange Act by NYSE Arca to list the Shares of the Trust.

Shares of the Trust began trading on NYSE Arca on January 11, 2024.

On January 10, 2024, the SEC approved an application under Rule 19b-4 of the Exchange Act by NYSE Arca to list the Shares of the Trust.

Shares of the Trust

began trading on NYSE Arca on January 11, 2024.

The Trust’s trading symbol on NYSE Arca is “GBTC” and the CUSIP number for its Shares is 389637109.

Summary of Significant Accounting Policies

In the opinion of management of the Sponsor of the Trust, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position as of March 31, 2024 and December 31, 2023 and results of operations for the three months ended March 31, 2024 and 2023 have been made.

In the opinion of management of the Sponsor of the Trust, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position as of June 30, 2024 and December 31, 2023 and results of operations for the three and six months ended June 30, 2024 and 2023 have been made.

The results of operations for the periods presented are not necessarily indicative of the results of operations expected for the full year.

These unaudited financial statements should be read in conjunction with the audited financial statements

for the year ended December 31, 2023 included in the Trust’s Annual Report on Form 10-K.

These unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2023 included in the Trust’s Annual Report on Form 10-K.

Certain prior period information has been updated to conform to the current period financial statement presentation without a material change to the Statements of Assets and Liabilities.

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To determine which market is the Trust’s principal market (or in the absence of a principal market, the most advantageous market) for purposes of calculating the Trust’s net asset value in accordance with U.S.

GAAP (“Principal Market NAV”), the Trust follows ASC 820-10,

which outlines the application of fair value accounting.

determines fair value to be the price that would be received for Bitcoin in a current sale, which assumes an orderly transaction between market participants on the measurement date.

requires the Trust to assume that Bitcoin is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market.

GAAP (“Principal Market NAV”), the Trust follows ASC 820-10, which outlines the application of fair value accounting.

ASC 820-10 determines fair value to be the price that would be received for Bitcoin in a current sale, which assumes an orderly transaction between market participants on the measurement date.

ASC 820-10 requires the Trust to assume that Bitcoin is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market.

Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.

1 unchanged sentence

Therefore, the Trust looks to market-based volume and level of activity for Digital Asset Markets.

The Authorized Participant(s), or a Liquidity Provider, may transact in a Brokered Market, a Dealer Market, Principal-to-Principal

Markets and Exchange Markets (referred to as “Trading Platform Markets” in this Quarterly Report), each as defined in the FASB ASC Master Glossary (collectively, “Digital Asset Markets”).

The Authorized Participant(s), or a Liquidity Provider, may transact in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets (referred to as “Trading Platform Markets” in this Quarterly Report), each as defined in the FASB ASC Master Glossary (collectively, “Digital Asset Markets”).

In determining which of the eligible Digital Asset Markets is the Trust’s principal market, the Trust reviews these criteria in the following order:

Asset Trading Platform Markets that the Trust reasonably believes are operating in compliance with applicable law, including federal and state licensing requirements, based upon information and assurances provided to it by each market.

First, the Trust reviews a list of Digital Asset Markets that maintain practices and policies designed to comply with anti-money laundering ( “AML”) and know-your-customer (“KYC”) regulations, and non-Digital Asset Trading Platform Markets that the Trust reasonably believes are operating in compliance with applicable law, including federal and state licensing requirements, based upon information and assurances provided to it by each market.

Second, the Trust sorts these Digital Asset Markets from high to low by market-based volume and level of activity of Bitcoin traded on each Digital Asset Market in the trailing twelve months.

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Based on information reasonably available to the Trust, Trading Platform Markets have the greatest volume and level of activity for the asset.

The Trust therefore looks to accessible Trading Platform Markets as opposed to the Brokered Market, Dealer Market and Principal-to-Principal

Markets to determine its principal market.

The Trust therefore looks to accessible Trading

Platform Markets as opposed to the Brokered Market, Dealer Market and Principal-to-Principal Markets to determine its principal market.

As a result of the aforementioned analysis, a Trading Platform Market has been selected as the Trust’s principal market.

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To the extent that valuations are based on sources that are less observable or unobservable in the market, the determination of fair value requires more judgment.

Fair value estimates

do not necessarily represent the amounts that may be ultimately realized by the Trust.

Fair value estimates do not necessarily represent the amounts that may be ultimately realized by the Trust.

Fair Value Measurement Using

(Amounts in thousands)

March 31, 2024

June 30, 2024

Investment in Bitcoin

Value Measurement Using

Fair Value Measurement Using

(Amounts in thousands)

2 unchanged sentences

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-08,

Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60):

Accounting for and Disclosure of Crypto Assets

(“ASU 2023-08”).

is intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income.

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60):

Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”).

ASU 2023-08 is intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income.

The amendments also improve the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period.

1 unchanged sentence

Early adoption is permitted for both interim and annual financial statements that have not yet been issued.

The Trust adopted this new guidance on January 1, 2024, with no material impact on its financial statements and disclosures as the Trust historically used fair value as its method of accounting for Bitcoin in accordance with its classification as an investment company for accounting purpos es.

Fair Value of Bitcoin

Bitcoin is held by the Custodian on behalf of the Trust and is carried at fair value.

As of March 31, 2024 and December 31, 2023 the Trust held 335,932.8104680 and 619,525.9291702 Bitcoin, respectively.

As of March 31, 2024, the Trust recorded a payable of $ 58,252,673 representing the redemption of 820.1561472 Bitcoin covered by contractually binding orders for the redemption of Shares where the Bitcoin has not yet been transferred out of the Trust’s account.

The redemption of 820.1561472 Bitcoin was subsequently settled in April 2024.

The Trust determined the fair value per Bitcoin to be $ 71,026.32 and $ 42,533.28 on March 31, 2024 and December 31, 2023, respectively, using the price provided at 4:00 p.m., New York time, by the Digital Asset Trading Platform Market considered to be the Trust’s principal market (Coinbase).

As of June 30, 2024 and December 31, 2023 the Trust held 275,734.98616801 and 619,525.92917020 Bitcoin, respectively.

The Trust determined the fair value per Bitcoin to be $ 61,929.29 and $ 42,533.28 on June 30, 2024 and December 31, 2023, respectively, using the price provided at 4:00 p.m., New York time, by the Digital Asset Trading Platform Market considered to be the Trust’s principal market (Coinbase).

The following represents the changes in quantity of Bitcoin and the respective fair value:

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Net realized gain on investment in Bitcoin sold for redemption of Shares

Ending balance as of March 31, 2024

Ending balance as of June 30, 2024

275,734.98616801

Creations and Redemptions of Shares

At March 31, 2024 and December 31, 2023, there were an unlimited number of Shares authorized by the Trust.

At June 30, 2024 and December 31, 2023 , there were an unlimited number of Shares authorized by the Trust.

The Trust creates and redeems Shares from time to time, but only in one or more Baskets.

The creation and redemption of Baskets on behalf of investors are made by the Authorized Participant in exchange for the delivery of Bitcoin to the Trust or the distribution of Bitcoin by the Trust.

The number of Bitcoin required for each creation Basket or redemption Basket is determined by dividing (x) the number of Bitcoin owned by the Trust at 4:00 p.m., New York time, on such trade date of a creation or redemption order, after deducting the number of Bitcoin representing the U.S.

The amount of Bitcoin required for each creation Basket or redemption Basket is determined by dividing (x) the amount of Bitcoin owned by the Trust at 4:00 p.m., New York time, on such trade date of a creation or redemption order, after deducting the amount of Bitcoin representing the U.S.

dollar value of accrued but unpaid fees and expenses of the Trust, by (y) the number of Shares outstanding at such time and multiplying the quotient obtained by 10,000.

Each Share represented approximately 0.0009 of one Bitcoin at both March 31, 2024 and December 31, 2023.

The decrease in the number of Bitcoin represented by each Share since inception is primarily a result of the periodic withdrawal of Bitcoin to pay the Sponsor’s Fee.

Each Share represented approximately 0.0009 of one Bitcoin at both June 30, 2024 and December 31, 2023.

The decrease in the amount of Bitcoin represented by each Share since inception is primarily a result of the periodic withdrawal of Bitcoin to pay the Sponsor’s Fee.

The cost basis of investments in Bitcoin recorded by the Trust is the fair value of Bitcoin, as determined by the Trust, at 4:00 p.m., New York time, on the date of transfer to the Trust by the Authorized Participant, or Liquidity Provider, based on the creation Baskets.

The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of each Share to investors.

The Authorized Participant or Liquidity Provider may realize significant profits buying, selling, creating, and, if permitted, redeeming Shares as a result of changes in the value of Shares or Bitcoin.

The Authorized Participant or Liquidity Provider may realize significant profits buying, selling, creating, and redeeming Shares as a result of changes in the value of Shares or Bitcoin.

Effective October 28, 2014, the Trust suspended its redemption program, in which shareholders were permitted to request the redemption of their Shares through Genesis, the sole Authorized Participant at the time out of concern that the redemption program was in violation of Regulation M under the Exchange Act, resulting in a settlement reached with the SEC.

On October 19, 2021, NYSE Arca filed an application with the SEC pursuant to Rule 19b-4

under the Exchange Act to list the Shares of the Trust on NYSE Arca.

On June 29, 2022, the SEC denied NYSE Arca’s 19b-4

application and the Sponsor subsequently petitioned the United States Court of Appeals for the District of Columbia for review of the SEC’s June 29, 2022 final order denying approval to list shares of the Trust on NYSE Arca as an exchange-traded product.

On October 19, 2021, NYSE Arca filed an application with the SEC pursuant to Rule 19b-4 under the Exchange Act to list the Shares of the Trust on NYSE Arca.

On June 29, 2022, the SEC denied NYSE Arca’s 19b-4 application and the Sponsor subsequently petitioned the United States Court of Appeals for the District of Columbia for review of the SEC’s June 29, 2022 final order denying approval to list shares of the Trust on NYSE Arca as an exchange-traded product.

On August 29, 2023, the D.C.

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Circuit Court of Appeals issued a formal mandate.

Ultimately, on January 10, 2024, the SEC approved NYSE Arca’s 19b-4

application to list the Shares of the Trust on NYSE Arca as an exchange-traded product and in connection with the approval of the 19b-4

Application, the Sponsor authorized the commencement of a redemption program.

Three Months Ended March 31,

Ultimately, on January 10, 2024, the SEC approved NYSE Arca’s 19b-4 application to list the Shares of the Trust on NYSE Arca as an exchange-traded product and in connection with the approval of the 19b-4 Application, the Sponsor authorized the commencement of a redemption program.

Three Months Ended June 30,

Six Months Ended June 30,

Activity in Number of Shares Issued and Redeemed:

4 unchanged sentences

( 381,860,000

Three Months Ended June 30,

Six Months Ended June 30,

(Amounts in thousands)

Three Months Ended March 31,

Activity in Value of Shares Issued and Redeemed:

1 unchanged sentence

Shares redeemed

Net Change in Number of Shares Issued and Redeemed

Net Change in Value of Shares Issued and Redeemed

Bitcoin receivable represents the quantity of Bitcoin covered by contractually binding orders for the creation of Shares where the Bitcoin has not yet been transferred to the Trust’s account.

Generally, ownership of the Bitcoin is transferred within two business days of the trade date.

As of June 30,

(Amounts in thousands)

Three Months Ended March 31,

Bitcoin receivable

1 unchanged sentence

Generally, ownership of the Bitcoin is transferred within two business days of the trade date.

As of June 30,

(Amounts in thousands)

Three Months Ended March 31,

Bitcoin payable

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federal income tax (currently at the rate of 21 %) on its net taxable income and certain distributions made by the Trust to shareholders would be treated as taxable dividends to the extent of the Trust’s current and accumulated earnings and profits.

In accordance with GAAP, the Trust has defined the threshold for recognizing the benefits of tax return positions in the financial statements as “more-likely-than-not”

to be sustained by the applicable taxing authority and requires measurement of a tax position meeting the “more-likely-than-not”

threshold, based on the largest benefit that is more than 50% likely to be realized.

Tax positions not deemed to meet the “more-likely-than-not”

threshold are recorded as a tax benefit or expense in the current period.

As of, and during the periods ended March 31, 2024 and December 31, 2023, the Trust did not have a liability for any unrecognized tax amounts.

However, the Sponsor’s conclusions concerning its determination of “more-likely-than-not”

tax positions may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance, and ongoing analyses of and changes to tax laws, regulations and interpretations thereof.

The Sponsor of the Trust has evaluated whether or not there are uncertain tax positions that require financial statement recognition and has determined that no reserves for uncertain tax positions related to federal, state and local income taxes existed as of March 31, 2024 or December 31, 2023.

In accordance with GAAP, the Trust has defined the threshold for recognizing the benefits of tax return positions in the financial statements as “more-likely-than-not” to be sustained by the applicable taxing authority and requires measurement of a tax position meeting the “more-likely-than-not” threshold, based on the largest benefit that is more than 50% likely to be realized.

Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current period.

As of, and during the periods ended June 30, 2024 and December 31, 2023, the Trust did not have a liability for any unrecognized tax amounts.

However, the Sponsor’s conclusions concerning its determination of “more-likely-than-not” tax positions may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance, and ongoing analyses of and changes to tax laws, regulations and interpretations thereof.

Related Parties

The Trust considered the following entities, their directors, and certain employees to be related parties of the Trust as of March 31, 2024

The Trust considered the following entities, their directors, and certain employees to be related parties of the Trust as of June 30, 2024:

DCG, Genesis, Grayscale and Grayscale Securities.

As of March 31, 2024 and December 31, 2023, 133,009 and 131,794 Shares of the Trust were held by related parties of the Trust, respectively.

The Sponsor’s parent, an affiliate of the Trust, holds a minority interest in Coinbase, Inc., the parent company of the Custodian, that represents less than 1.0 % of Coinbase ,

Inc.’s ownership.

As of June 30, 2024 and December 31, 2023, 129,009 and 131,794 Shares of the Trust were held by related parties of the Trust, respectively.

The Sponsor’s parent, an affiliate of the Trust, holds a minority interest in Coinbase, Inc., the parent company of the Custodian, that represents less than 1.0 % of Coinbase, Inc.’s ownership.

On January 9, 2024, the Sponsor and the Trustee entered into Amendment No.

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The Sponsor’s Fee accrues daily in U.S.

dollars and is payable in Bitcoin, monthly in arrears.

dollars and is payable in Bitcoin, daily in arrears.

The amount of Bitcoin payable in respect of each daily U.S.

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dollar value of Bitcoin is determined by reference to the Digital Asset Trading Platform Market that the Trust considers its principal market as of 4:00 p.m., New York time, on each valuation date.

The Trust held no Incidental Rights or IR Virtual Currency as of March 31, 2024 and December 31, 2023.

No Incidental Rights or IR Virtual Currencies have been distributed in payment of the Sponsor’s Fee during the three months ended March 31, 2024 and 2023.

The Trust held no Incidental Rights or IR Virtual Currency as of June 30, 2024 and December 31, 2023.

No Incidental Rights or IR Virtual Currencies have been distributed in payment of the Sponsor’s Fee during the three and six months ended June 30, 2024 and 2023.

As partial consideration for receipt of the Sponsor’s Fee, the Sponsor is obligated under the Trust Agreement to assume and pay all fees and other expenses incurred by the Trust in the ordinary course of its affairs, excluding taxes, but including marketing fees;

administrator fees, if any;

administrator

fees, if any;

custodian fees;

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the costs of maintaining the Trust’s website and applicable license fees (together, the “Sponsor-paid Expenses”), provided that any expense that qualifies as an Additional Trust Expense will be deemed to be an Additional Trust Expense and not a Sponsor-paid Expense.

The Trust may incur certain extraordinary, non-recurring

expenses that are not Sponsor-paid Expenses, including, but not limited to, taxes and governmental charges, expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust to protect the Trust or the interests of shareholders, any indemnification of the Custodian or other agents, service providers or counterparties of the Trust, the fees and expenses related to the listing, quotation or trading of the Shares on any secondary market (including legal, marketing and audit fees and expenses) to the extent exceeding $ 600,000 in any given fiscal year and extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters (collectively “Additional Trust Expenses”).

The Trust may incur certain extraordinary, non-recurring expenses that are not Sponsor-paid Expenses, including, but not limited to, taxes and governmental charges, expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust to protect the Trust or the interests of shareholders, any indemnification of the Custodian or other agents, service providers or counterparties of the Trust, the fees and expenses related to the listing, quotation or trading of the Shares on any secondary market (including legal, marketing and audit fees and expenses) to the extent exceeding $ 600,000 in any given fiscal year and extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters (collectively “Additional Trust Expenses”).

In such circumstances, the Sponsor or its delegate (i) will instruct the Custodian to withdraw from the Vault Balance Bitcoins in such quantity as may be necessary to permit payment of such Additional Trust Expenses and (ii) may either (x) cause the Trust (or its delegate) to convert such Bitcoins into U.S.

in each case in such quantity as may be necessary to permit payment of such Additional Trust Expenses.

For the three months ended March 31, 2024 and 2023, the Trust incurred Sponsor’s Fees of $ 94,877,619 and $ 71,084,974 , respectively.

As of March 31, 2024 and December 31, 2023, there were no accrued and unpaid Sponsor’s Fees.

dollars or other fiat currencies at the Actual Exchange Rate or (y) when the Sponsor incurs such expenses on behalf of the Trust, cause the Trust (or its delegate) to deliver such Bitcoins in kind to the Sponsor, in each case in such quantity as may be necessary to permit payment of such Additional Trust Expenses.

For the three months ended June 30, 2024 and 2023, the Trust incurred Sponsor’s Fees of $ 72,006,267 and $ 87,600,801 , respectively.

For the six months ended June 30, 2024 and 2023, the Trust incurred Sponsor’s Fees of $ 166,883,886 and $ 158,685,775 , respectively.

As of June 30, 2024 and December 31, 2023, there were no accrued and unpaid Sponsor’s Fees.

In addition, the Sponsor may pay Additional Trust Expenses on behalf of the Trust, which are reimbursable by the Trust to the Sponsor.

For the three months ended March 31, 2024 and 2023 the Sponsor did no t pay any Additional Trust Expenses on behalf of the Trust.

For the three and six months ended June 30, 2024 and 2023 the Sponsor did not pay any Additional Trust Expenses on behalf of the Trust.

On March 10, 2021, the Board of the Sponsor (the “Board”) approved the purchase by DCG, the parent company of the Sponsor, of up to $ 250 million worth of Shares of the Trust.

7 unchanged sentences

BCHG), Grayscale Digital Large Cap Fund LLC (OTCQX:

GDLC), Grayscale Ethereum Trust (ETH) (OTCQX:

GDLC), Grayscale Ethereum Trust (ETH) (NYSE Arca:

ETHE), Grayscale Ethereum Classic Trust (ETC) (OTCQX:

ETCG), and Grayscale Stellar Lumens Trust (XLM) (OTCQX:

ETCG), and Grayscale Stellar Lumens Trust (XLM) (OTCQX:GXLM).

This increased DCG’s prior authorization to purchase up to $ 1 billion worth of Shares by up to a maximum of $ 200 million.

The Share purchase authorization does not obligate DCG to acquire any specific number of Shares in any period, and may be expanded, extended, modified, or discontinued at any time.

From March 10, 2021 through March 31, 2023, DCG purchased a total of $ 771.8 million worth of Shares of the Trust under this authorization.

1, 2023 through March 31, 2024, DCG did not purchase any Shares of the Trust under this authorization.

From March 10, 2021 through June 30, 2022, DCG purchased a total of $ 771.8 million worth of Shares of the Trust under this authorization.

From July 1, 2022 through June 30, 2024 , DCG did not purchase any Shares of the Trust under this authorization.

Risks and Uncertainties

17 unchanged sentences

The test for determining whether a particular digital asset is a “security” is complex and difficult to apply, and the outcome is difficult to predict.

Public, though non-binding,

statements by senior officials at the SEC have indicated that the SEC did not consider Bitcoin or Ethereum to be securities, and does not currently consider Bitcoin to be a security.

The SEC staff has also provided informal assurances via no-action

letter to a handful of promoters that their digital assets are not securities.

Public, though non-binding, statements by senior officials at the SEC have indicated that the SEC did not consider Bitcoin or Ethereum to be securities, and does not currently consider Bitcoin to be a security.

The SEC staff has also provided informal assurances via no-action letter to a handful of promoters that their digital assets are not securities.

On the other hand, the SEC has brought enforcement actions against the issuers and promoters of several other digital assets on the basis that the digital assets in question are securities.

5 unchanged sentences

To the extent a private key required to access a Bitcoin address is lost, destroyed or otherwise compromised and no backup of the private keys are accessible, the Trust may be unable to access the Bitcoin controlled by the private key and the private key will not be capable of being restored by the Bitcoin Network.

The processes by which Bitcoin transactions are settled are dependent on the Bitcoin peer-to-peer

network, and as such, the Trust is subject to operational risk.

The processes by which Bitcoin transactions are settled are dependent on the Bitcoin peer-to-peer network, and as such, the Trust is subject to operational risk.

A risk also exists with respect to previously unknown technical vulnerabilities, which may adversely affect the value of Bitcoin.

3 unchanged sentences

Financial Highlights Per Share Performance

Three Months Ended

Three Months Ended June 30,

Six Months Ended June 30,

Per Share Data:

Principal market net asset value, beginning of period

Net increase (decrease) in net assets from investment operations:

Net (decrease) increase in net assets from investment operations:

Net investment loss

Net realized and unrealized gain (loss)

Net increas e

in net assets resulting from operations

Net realized and unrealized (loss) gain

Net (decrease) increase in net assets resulting from operations

Principal market net asset value, end of period

11 unchanged sentences

Subsequent Events

As of the close of business on April 30

, 2024, the fair value of Bitcoin determined in accordance with the Trust’s accounting policy was $ 59,098.16 per Bitcoin.

There are no known events that have occurred that require disclosure other than that which has already b e

en disclosed in these notes to the financial statements.

On July 19, 2024 , the Sponsor of the Trust issued a press release announcing that its board of directors declared a pro rata distribution on the Shares of the Trust, pursuant to which each holder of Shares as of 4:00 PM ET on July 30, 2024 (the “Record Date,” and such holders, the “GBTC Record Holders”) was entitled to receive shares (the “BTC Shares”) of Grayscale Bitcoin Mini Trust (BTC) (the “BTC Trust”), a Delaware statutory trust sponsored by the Sponsor, in connection with its previously announced initial creation and distribution of BTC Shares (such transactions collectively, the “Initial Distribution”), as described in a definitive information statement on Schedule 14C filed with the Securities and Exchange Commission on July 30, 2024.

In the Initial Distribution, the Trust contributed approximately 10 % of the Bitcoin that it held as of 4:00 PM ET on the Record Date to the BTC Trust, and each GBTC Record Holder was entitled to receive BTC Shares pro rata based on a 1 :1 ratio, such that for each one (1) GBTC Share held by a GBTC Record Holder, such GBTC Record Holder was entitled to receive one (1) BTC Share on the Distribution Date.

In connection therewith, on July 31, 2024, the Trust completed its previously announced pro rata distribution of 303,690,100 shares of the BTC Trust to shareholders of the Trust as of 4:00 PM ET on the Record Date and contributed to the BTC Trust an amount of Bitcoin equal to approximately 10 % of the total Bitcoin held by the Trust as of the Record Date, equal to approximately 26,935.83753443 Bitcoin, as consideration and in exchange for the issuance of shares of the BTC Trust.

As of the close of business on July 29, 2024 , the fair value of Bitcoin determined in accordance with the Trust’s accounting policy was $ 67,297.37 per Bitcoin.

There are no known events that have occurred that require disclosure other than that which has already been disclosed in these notes to the financial statements.

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 1. Financial Statements