What changed in this filing

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Item 1. Financial Statements

2023-11-03 compared with 2023-08-04 · 50 added, 45 removed, 332 unchanged (22% of the section changed)

3 unchanged sentences

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

Investment in Bitcoin, at fair value (cost $ 7,088,012

and $ 7,158,661

as of June 30, 2023 and December 31, 2022, respectively)

September 30,

Investment in Bitcoin, at fair value (cost $ 7,052,369 and $ 7,158,661 as of September 30, 2023 and December 31, 2022, respectively)

Sponsor’s Fee payable, related party

11 unchanged sentences

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

June 30, 2023

September 30, 2023

Quantity of Bitcoin

11 unchanged sentences

(Amounts in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Investment income:

7 unchanged sentences

Net increase (decrease) in net assets resulting from operations

See accompanying notes to

unaudited financial statements.

See accompanying notes to the unaudited financial statements.

GRAYSCALE BITCOIN TRUST (BTC)

1 unchanged sentence

(Amounts in thousands, except change in Shares outstanding)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Increase (decrease) in net assets from operations:

54 unchanged sentences

Genesis Global Trading, Inc.

(“Genesis”), a wholly owned subsidiary of DCG, serves as a Liquidity Provider to Grayscale Securities .

(“Genesis”), a wholly owned subsidiary of DCG, served as a Liquidity Provider to Grayscale Securities from October 3, 2022 to September 12, 2023.

The Authorized Participant has engaged certain unaffiliated Liquidity Providers, and intends to engage additional Liquidity Providers who are unaffiliated with the Trust in the future.

The custodian of the Trust is Coinbase Custody Trust Company, LLC (the “Custodian”), a third-party service provider.

9 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 June 30, 2023 and December 31, 2022 and results of operations for the three and six months ended June 30, 2023 and 2022 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 September 30, 2023 and December 31, 2022 and results of operations for the three and nine months ended September 30, 2023 and 2022 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.

55 unchanged sentences

Amount at Fair

June 30, 2023

September 30, 2023

Investment in Bitcoin

6 unchanged sentences

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

As of June 30, 2023 and December 31, 2022 the Trust held 625,803.87494694

and 632,041.52945742

Bitcoin, respectively.

The Trust determined the fair value per Bitcoin to be $ 30,361.94

and $ 16,556.29

on June 30, 2023 and December 31, 2022, 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).

As of September 30, 2023 and December 31, 2022 the Trust held 622,656.98992690 and 632,041.52945742 Bitcoin, respectively.

The Trust determined the fair value per Bitcoin to be $ 27,030.47 and $ 16,556.29 on September 30, 2023 and December 31, 2022, 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).

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

17 unchanged sentences

Net realized gain on investment in Bitcoin

Ending balance as of June 30, 2023

Ending balance as of September 30, 2023

622,656.98992690

Creations and Redemptions of Shares

At June 30, 2023 and December 31, 2022, there were an unlimited number of Shares authorized by the Trust.

At September 30, 2023 and December 31, 2022, 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 of one Bitcoin at both June 30, 2023 and December 31, 2022.

Each Share represented approximately 0.0009 of one Bitcoin at both September 30, 2023 and December 31, 2022.

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.

6 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.

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.

The Sponsor’s petition remains pending.

(“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.

Circuit Court of Appeals granted the Sponsor’s petition and vacated the SEC’s order, finding that the denial of the Sponsor’s proposal was arbitrary and capricious.

The SEC has determined not to seek panel rehearing or rehearing en banc.

On October 23, 2023, the D.C.

Circuit Court of Appeals issued a formal mandate.

There is no guarantee that the ruling by the D.C.

Circuit Court of Appeals will ultimately result in approval of NYSE Arca’s 19b 4 application to list the Shares of the Trust on NYSE Arca.

On October 19, 2023, the Sponsor filed with the SEC a registration statement on Form S-3 to register the Shares of the Trust under the Securities Act of 1933.

The registration statement on Form S-3 has not been declared effective, and the Trust will not seek effectiveness of such registration statement unless and until the NYSE Arca Rule 19b-4 application is approved and the Trust receives an exemption or other relief from Regulation M to operate a redemption program.

The Trust makes no representation as to when or if such approval will be obtained and when such an exemption or relief will be available.

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.

25 unchanged sentences

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

As of, and during the periods ended June 30, 2023 and December 31, 2022, the Trust did not have a liability for any unrecognized tax amounts.

As of, and during the periods ended September 30, 2023 and December 31, 2022, 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”

1 unchanged sentence

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 June 30, 2023 or December 31, 2022.

Related Parties

1 unchanged sentence

DCG, Genesis, Genesis Global Holdco, LLC, Grayscale, Grayscale Securities, and CoinDesk Indices, Inc.

As of June 30, 2023 and December 31, 2022, 36,069,847

and 36,065,470 Shares of the Trust were held by related parties of the Trust, respectively.

As of September 30, 2023 and December 31, 2022, 36,070,527 and 36,065,470 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 June 30, 2023 and December 31, 2022.

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, 2023 and 2022.

The Trust held no Incidental Rights or IR Virtual Currency as of September 30, 2023 and December 31, 2022.

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, 2023 and 2022.

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;

12 unchanged sentences

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, Incidental Rights and/or IR Virtual Currency in kind to the Sponsor in satisfaction of such Additional Trust Expenses.

For the three months ended June 30, 2023 and June 30, 2022 the Trust incurred Sponsor’s Fees of $ 87,600,801 and $ 103,668,521 , respectively.

For the six months ended June 30, 2023 and 2022, the Trust incurred Sponsor’s Fees of $ 158,685,775 and $ 234,693,141 , respectively.

As of June 30, 2023 and December 31, 2022, there were no accrued and unpaid Sponsor’s Fees.

For the three months ended September 30, 2023 and September 30, 2022 the Trust incurred Sponsor’s Fees of $ 88,406,944 and $ 68,251,452 , respectively.

For the nine months ended September 30, 2023 and 2022, the Trust incurred Sponsor’s Fees of $ 247,092,719 and $ 302,944,593 , respectively.

As of September 30, 2023 and December 31, 2022, 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 six months ended June 30, 2023 and 2022 the Sponsor did no t pay any Additional Trust Expenses on behalf of the Trust.

For the three and nine months ended September 30, 2023 and 2022 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.

12 unchanged sentences

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 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, 2023 DCG did not purchase any Shares of the Trust under this authorization.

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

From October 1, 2022 through September 30, 2023 DCG did not purchase any Shares of the Trust under this authorization.

Risks and Uncertainties

22 unchanged sentences

For example, it may become more difficult for Bitcoin to be traded, cleared and custodied as compared to other digital assets that are not considered to be securities, which could, in turn, negatively affect the liquidity and general acceptance of Bitcoin and cause users to migrate to other digital assets.

As such, any determination that Bitcoin is a security under federal or state securities laws may adversely affect the value of Bitcoin and, as a result, an

investment in the Shares.

As such, any determination that Bitcoin is a security under federal or state securities laws may adversely affect the value of Bitcoin and, as a result, an investment in the Shares.

In addition, if Bitcoin is in fact a security, the Trust could be considered an unregistered “investment company” under the Investment Company Act of 1940, which could necessitate the Trust’s liquidation.

8 unchanged sentences

Financial Highlights Per Share Performance

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Per Share Data

17 unchanged sentences

Subsequent Events

As of the close of business on August 1, 2023, the fair value of Bitcoin determined in

accordance with the Trust’s accounting policy was $ 29,264.00 per Bitcoin.

As of the close of business on October 30, 2023, the fair value of Bitcoin determined in accordance with the Trust’s accounting policy was $ 34,455.72 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