What changed in this filing

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Item 1. Financial Statements

2022-05-06 compared with 2021-11-05 · 121 added, 86 removed, 243 unchanged (46% of the section changed)

3 unchanged sentences

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

September 30, 2021

March 31, 2022

December 31, 2021

Investment in Bitcoin, at fair value (cost $ 7,340,191 and $ 5,543,305 as of September 30, 2021 and December 31, 2020, respectively)

Investment in Bitcoin, at fair value (cost $ 7,267,351 and $ 7,303,280 as of March 31, 2022 and December 31, 2021, respectively)

Sponsor’s Fee payable, related party

Total liabilities

Net Assets consists of:

Net Assets consist of:

Paid-in-capital

1 unchanged sentence

Accumulated net realized gain on investment in Bitcoin

Accumulated net change in unrealized appreciation on investment in Bitcoin

Accumulated net unrealized appreciation on investment in Bitcoin

Shares issued and outstanding, no par value (unlimited Shares authorized)

4 unchanged sentences

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

September 30, 2021

March 31, 2022

Quantity of Bitcoin

% of Net Assets

Investment in Bitcoin

1 unchanged sentence

December 31, 2021

Quantity of Bitcoin

% of Net Assets

Investment in Bitcoin

4 unchanged sentences

(Amounts in thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

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

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 change in unrealized appreciation (depreciation) on investment in Bitcoin

Net realized and unrealized gain (loss) on investment

Net increase (decrease) 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 September 30,

Nine Months Ended September 30,

Increase in net assets from operations:

Three Months Ended March 31,

Increase (decrease) in net assets from operations:

Net investment loss

Net realized gain on investment in Bitcoin

Net change in unrealized appreciation on investment in Bitcoin

Net increase in net assets resulting from operations

Net change in unrealized appreciation (depreciation) on investments in Bitcoin

Net increase (decrease) in net assets resulting from operations

Increase in net assets from capital share transactions:

1 unchanged sentence

Net increase in net assets resulting from capital share transactions

Total increase in net assets from operations and capital share transactions

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

Beginning of period

End of period

Change in Shares outstanding:

Changes in Shares outstanding

Shares outstanding at beginning of period

9 unchanged sentences

Subject to receipt of regulatory approval and approval by the Sponsor in its sole discretion, the Trust may in the future operate a redemption program.

The Trust currently has no intention of seeking regulatory approval to operate an ongoing redemption program.

The Trust has not sought such relief as of the date of this Quarterly Report.

The Trust’s investment objective is for the value of the Shares (based on Bitcoin per Share) to reflect the value of Bitcoin held by the Trust, less the Trust’s expenses and other liabilities.

3 unchanged sentences

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.

5 unchanged sentences

HZEN), Grayscale Litecoin Trust (LTC) (OTCQX:

LTCN), Grayscale Livepeer Trust (LPT), Grayscale Stellar Lumens Trust (XLM) (OTCQX:

LTCN), Grayscale Livepeer Trust (LPT), Grayscale Solana Trust (SOL), Grayscale Stellar Lumens Trust (XLM) (OTCQX:

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

ZCSH), Grayscale Decentralized Finance Fund LLC (DeFi), and Grayscale Digital Large Cap Fund LLC (OTCQX:

GDLC), each of which is an affiliate of the Trust.

ZCSH), Grayscale Decentralized Finance (DeFi) Fund LLC, 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 Litecoin Trust (LTC), and Grayscale Digital Large Cap Fund LLC.

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

GFOF) product.

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

6 unchanged sentences

The responsibilities of the Transfer Agent are to maintain creations, redemptions, transfers, and distributions of the Trust’s Shares which are primarily held in book-entry form.

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

BNY Mellon Asset Servicing provides administration and accounting services to the Trust.

The Administrator’s fees are paid on behalf of the Trust by the Sponsor.

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

2 unchanged sentences

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 September 30, 2021 and December 31, 2020 and results of operations for the three and nine months ended September 30, 2021 and 2020 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 March 31, 2022 and December 31, 2021 and results of operations for the three months ended March 31, 2022 and 2021 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.

11 unchanged sentences

Principal Market and Fair Value Determination

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 (“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.

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.

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 the Authorized Participant when assessing entity-specific and market-based volume and level of activity for Digital Asset Markets.

The Authorized Participant transacts in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets, each as defined in the FASB ASC Master Glossary (collectively, “Digital Asset Markets”).

The Authorized Participant transacts in a Brokered Market, a Dealer Market, Principal-to-Principal

Markets and Exchange Markets, each as defined in the FASB ASC Master Glossary (collectively, “Digital Asset Markets”).

The Authorized Participant, as a related party of the Sponsor, provides information about the Digital Asset Markets on which it transacts to the Trust.

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

First, the Trust reviews a list of Digital Asset Markets and excludes any Digital Asset Markets that are non-accessible to the Trust and the Authorized Participant.

The Trust or the Authorized Participant does not have access to Digital Asset Exchange Markets that do not have a BitLicense and has access only to non-Digital Asset Exchange Markets that the Authorized Participant 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 and excludes any Digital Asset Markets that are non-accessible

to the Trust and the Authorized Participant.

The Trust or the Authorized Participant does not have access to Digital Asset Exchange Markets that do not have a BitLicense and has access only to non-Digital

Asset Exchange Markets that the Authorized Participant 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 the remaining Digital Asset Markets from high to low by entity-specific and market-based volume and level of activity of Bitcoin traded on each Digital Asset Market in the trailing twelve months.

Third, the Trust then reviews intra-day pricing fluctuations and the degree of variances in price on Digital Asset Markets to identify any material notable variances that may impact the volume or price information of a particular Digital Asset Market.

Third, the Trust then reviews intra-day

pricing fluctuations and the degree of variances in price on Digital Asset Markets to identify any material notable variances that may impact the volume or price information of a particular Digital Asset Market.

Fourth, the Trust then selects a Digital Asset Market as its principal market based on the highest market-based volume, level of activity and price stability in comparison to the other Digital Asset Markets on the list.

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

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

Markets to determine its principal market.

As a result of the analysis, an Exchange Market has been selected as the Trust’s principal market.

23 unchanged sentences

(Amounts in thousands)

September 30, 2021

Amount at Fair

March 31, 2022

Investment in Bitcoin

Fair Value Measurement Using

(Amounts in thousands)

Amount at Fair

December 31, 2021

2 unchanged sentences

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

As of September 30, 2021, and December 31, 2020, the Trust held 648,068.81398005 and 607,039.48515191 Bitcoin, respectively.

The Trust determined the fair value per Bitcoin to be $ 43,529.16 and $ 29,185.05 on September 30, 2021 and December 31, 2020, respectively, using the price provided at 4:00 p.m., New York time, by the Digital Asset Exchange Market considered to be the Trust’s principal market (Coinbase Pro).

As of March 31, 2022 and December 31, 2021 the Trust held 641,637.82510544 and 644,809.96863835 Bitcoin, respectively.

The Trust determined the fair value per Bitcoin to be $ 45,595.55 and $ 45,867.86 on March 31, 2022 and December 31, 2021, respectively, using the price provided at 4:00 p.m., New York time, by the Digital Asset Exchange Market considered to be the Trust’s principal market (Coinbase Pro).

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

(Amounts in thousands, except Bitcoin amounts)

Balance at January 1, 2020

Beginning balance as of January 1, 2021

607,039.48515191

5 unchanged sentences

Net realized gain on investment in Bitcoin

Balance at December 31, 2020

Ending balance as of December 31, 2021

644,809.96863835

Bitcoin contributed

(Amounts in thousands, except Bitcoin amounts)

Beginning balance as of January 1, 2022

644,809.96863835

Bitcoin contributed

Bitcoin distributed for Sponsor’s Fee, related party

( 3,172.14353291

Net change in unrealized appreciation on investment in Bitcoin

Net change in unrealized depreciation on investment in Bitcoin

Net realized gain on investment in Bitcoin

Balance at September 30, 2021

Ending balance as of March 31, 2022

641,637.82510544

Creations and Redemptions of Shares

At September 30, 2021 and December 31, 2020, there were an unlimited number of Shares authorized by the Trust.

At March 31, 2022 and December 31, 2021, there were an unlimited number of Shares authorized by the Trust.

The Trust creates (and, should the Trust commence a redemption program, redeems) Shares from time to time, but only in one or more Baskets.

2 unchanged sentences

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 100.

Each Share represented approximately 0.0009 and 0.0010 of one Bitcoin at September 30, 2021 and December 31, 2020, respectively.

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

Each Share represented approximately 0.0009 of one Bitcoin at both March 31, 2022 and December 31, 2021.

The decrease in the number of Bitcoin represented by each Share 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 based on the creation Baskets.

5 unchanged sentences

On October 19, 2021, NYSE Arca, Inc.

(“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.

As of the date of this filing, the NYSE Arca 19b-4 application has not been approved by the SEC and the Trust has not obtained relief from the SEC under 17 CFR §§ 242.101 and 102, and the Trust makes no representation as to when or if such approval and relief will be obtained.

(“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.

As of the date of this Quarterly Report, the NYSE Arca 19b-4

application has not been approved by the SEC and the Trust has not sought relief from the SEC under Regulation M to operate an ongoing redemption program, and neither the Sponsor nor the Trust makes any representation as to if or when such approval and relief will be obtained.

As of January 1, 2016, an amendment to the Trust Agreement was made to ensure that the Trust Agreement was consistent with the treatment of the Trust as a grantor trust.

11 unchanged sentences

federal income tax purposes.

However, due to the uncertain treatment of digital currencies, including forks, airdrops and similar occurrences for U.S.

However, due to the uncertain treatment of digital assets, including forks, airdrops and similar occurrences for U.S.

federal income tax purposes, there can be no assurance in this regard.

5 unchanged sentences

In that event, the Trust would be subject to entity-level U.S.

federal income tax (currently at the rate of 21 %) on its net taxable income and certain distributions made by the Trust to s hareholders 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 September 30, 2021 and December 31, 2020, 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 on-going 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 September 30, 2021 or December 31, 2020.

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, 2022 and December 31, 2021, 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 on-going

analyses of and changes to tax laws, regulations and interpretations thereof.

Related Parties

The Trust considers the following entities, their directors, and employees to be related parties of the Trust:

DCG, Genesis, Grayscale and TradeBlock, Inc.

As of September 30, 2021 and December 31, 2020, 16,531,978 and 14,512,320 Shares of the Trust were held by related parties of the Trust, respectively.

DCG, Genesis, Grayscale and CoinDesk Indices, Inc.

As of March 31, 2022 and December 31, 2021, 30,245,514 and 25,327,433 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.

7 unchanged sentences

dollar value of Bitcoin is determined by reference to the Digital Asset Exchange 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 September 30, 2021 and December 31, 2020.

No Incidental Rights or IR Virtual Currencies have been distributed in payment of the Sponsor’s Fee during the three and nine months ended September 30, 2021 and 2020.

The Trust held no Incidental Rights or IR Virtual Currency as of March 31, 2022 and December 31, 2021.

No Incidental Rights or IR Virtual Currencies have been distributed in payment of the Sponsor’s Fee during the three months ended March 31, 2022 and 2021.

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;

8 unchanged sentences

the costs of maintaining the Trust’s website and applicable license fees (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 (including in connection with any Incidental Rights and any IR Virtual Currency), 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 Bitcoin account Bitcoins, Incidental Rights and/or IR Virtual Currency 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, Incidental Rights and/or IR Virtual Currency into U.S.

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 (including in connection with any Incidental Rights and any IR Virtual Currency), 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”).

circumstances, the Sponsor or its delegate (i) will instruct the Custodian to withdraw from the Digital Asset Account Bitcoins, Incidental Rights and/or IR Virtual Currency 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, Incidental Rights and/or IR Virtual Currency into U.S.

dollars or other fiat currencies at the Actual Exchange Rate or (y) cause the Trust (or its delegate) to deliver such Bitcoins, Incidental Rights and/or IR Virtual Currency in kind in satisfaction of such Additional Trust Expenses.

For the three months ended September 30, 2021 and 2020, the Trust incurred Sponsor’s Fees of $ 137,296,546 and $ 22,080,009 , respectively.

For the nine months ended September 30, 2021 and 2020, the Trust incurred Sponsor’s Fees of $ 433,069,989 and $ 48,676,800 , respectively.

As of September 30, 2021 and December 31, 2020, there were no accrued and unpaid Sponsor’s Fees.

For the three months ended March 31, 2022 and 2021, the Trust incurred Sponsor’s Fees of $ 131,024,620 and $ 144,299,795 , respectively.

As of March 31, 2022 and December 31, 2021, 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 and nine months ended September 30, 2021 and 2020, the Sponsor did no t pay any Additional Trust Expenses on behalf of the Trust.

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

For the three months ended March 31, 2022 and 2021 the Sponsor did no t 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.

Subsequently, DCG authorized such purchase.

On April 30, 2021, the Board approved the purchase by DCG of up to $ 750 million worth of Shares of the Trust.

This increased DCG’s prior authorization to purchase of up to $ 250 million worth of Shares by $ 500 million .

This increased DCG’s prior authorization to purchase up to $ 250 million worth of Shares by $ 500 million.

On October 20, 2021, the Board of the Sponsor approved the purchase by DCG, the parent company of the Sponsor, of up to $ 1 billion worth of Shares of the Trust.

Subsequently, DCG authorized such purchase.

This increases DCG’s prior authorization to purchase up to $ 750 million worth of Shares by $ 250 million.

This increased DCG’s prior authorization to purchase up to $ 750 million worth of Shares by $ 250 million.

On March 2, 2022, the Board approved the purchase by DCG of up to an aggregate total of $ 200 million worth of Shares of the Trust and s

hares of any of the following five investment products the Sponsor also acts as the sponsor and manager of, including Grayscale Bitcoin Cash Trust (BCH) (OTCQX:

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

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

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

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

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

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, 2022, DCG has purchased a total of $ 750.1 million worth of Shares of the Trust.

Risks and Uncertainties

5 unchanged sentences

If Digital Asset Markets continue to experience significant price fluctuations, the Trust may experience losses.

Several factors may affect the price of Bitcoin, including, but not limited to, global Bitcoin supply and demand, theft of Bitcoin from global exchanges or vaults, competition from other forms of digital currency or payment services, global or regional political, economic or financial conditions, and other unforeseen market events and situations .

The Bitcoin held by the Trust are commingled and the Trust’s shareholders have no specific rights to any specific Bitcoin.

6 unchanged sentences

As a result, any incorrectly executed Bitcoin transactions could adversely affect an investment in the Shares.

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.

The Securities and Exchange Commission (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 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 also provided informal assurances to a handful of promoters that their digital assets are not securities.

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

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, it may have material adverse consequences for Bitcoin.

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 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 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.

The Trust relies on third party service providers to perform certain functions essential to its operations.

Any disruptions to the Trust’s or the Trust’s service providers’ business operations resulting from business restrictions, quarantines or restrictions on the ability of personnel to perform their jobs as a result of the COVID-19 pandemic could have an adverse impact on the Trust’s ability to access critical services and would be disruptive to the operation of the Trust.

pandemic could have an adverse impact on the Trust’s ability to access critical services and would be disruptive to the operation of the Trust.

Financial Highlights Per Share Performance

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Per Share Data:

Net asset value, beginning of period

Net increase in net assets from investment operations:

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

Net investment loss

Net realized and unrealized gain

Net increase in net assets resulting from operations

Net realized and unrealized gain (loss)

Net increase (decrease) in net assets resulting from operations

Net asset value, end of period

2 unchanged sentences

Ratios of net investment loss and expenses to average net assets have been annualized.

An i nd i v i du a l shareholde r ’ s r eturn , ratios, and per Share performance m a y va r y from those presented above b a s e d on the ti m ing of S h a re t r ansac ti ons.

Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period and assuming redemption on the last day of the period and has been annualized.

An individual shareholder’s return, ratios, and per Share performance may vary from those presented above based on the timing of Share transactions.

The amount shown for a Share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the number of Shares issued in Creations occurring at an operational value derived from an operating metric as defined in the Trust Agreement.

Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period and assuming redemption on the last day of the period.

Indemnifications

4 unchanged sentences

Subsequent Events

On October 19, 2021, pursuant to the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934, and Rule 19b-4 thereunder, NYSE Arca, Inc., filed a Form 19b-4 proposing to list and trade shares of the Trust under NYSE Arca Rule 8.201-E (Commodity Based Trust Shares).

On October 20, 2021, the Board of the Sponsor approved the purchase by DCG, the parent company of the Sponsor, of up to $ 1 billion worth of Shares of the Trust.

Subsequently, DCG authorized such purchase.

This increases DCG’s prior authorization to purchase up to $ 750 million worth of Shares by $ 250 million.

Through November 1, 2021, DCG has purchased $ 558 million worth of Shares.

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.

As of the close of business on November 1, 2021 the fair value of Bitcoin determined in accordance with the Trust’s accounting policy was $ 61,504.85 per Bitcoin.

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

As of the close of business on May 2, 2022, the fair value of Bitcoin determined in accordance with the Trust’s accounting policy was

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