Grayscale CoinDesk Crypto 5 ETF 10-Q

Item 2. 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 (“U.S. 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. Factors that could cause or contribute to these differences include, but are not limited to, those set forth under Part II, Item 1A. Risk Factors in this Quarterly Report or in Part I, Item 1A. Risk Factors or other sections of our Annual Report on Form 10-K for the year ended. Fund Overview The Fund is a passive entity that is managed and administered by the Manager and does not have any officers, directors or employees. The Fund holds Fund Components and, from time to time on a periodic basis, issues Creation Baskets in exchange for deposits of Fund Components. As a passive investment vehicle, the Fund’s investment objective is for the value of the Shares to reflect the value of the Fund Components held by the Fund, determined by reference to the Digital Asset Reference Rates and weightings within the Fund, less the Fund’s expenses and other liabilities. To date, the Fund has not met its investment objective and the Shares quoted on OTCQX have not reflected the value of Fund Components, less the Fund’s expenses and other liabilities, but have instead traded at both premiums and discounts to such value, which at times have been substantial. The Fund is not managed like a business corporation or an active investment vehicle. Critical Accounting Policies and Estimates Investment Transactions and Revenue Recognition The Fund considers investment transactions to be the receipt of Fund Components for Share creations and the delivery of Fund Components for Share redemptions or for payment of expenses in Fund Components. At this time, the Fund is not accepting redemption requests from shareholders. The Fund records its investment transactions on a trade date basis and changes in fair value are reflected as net change in unrealized appreciation or depreciation on investments. Realized gains and losses are calculated using the specific identification method. Realized gains and losses are recognized in connection with transactions including settling obligations for the Manager’s Fee in the Fund Components. Principal Market and Fair Value Determination To determine which market is the Fund’s principal market for each Fund Component (or in the absence of a principal market, the most advantageous market) for purposes of calculating the Fund’s NAV, the Fund follows FASB 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 each Fund Component in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Fund to assume that each Fund Component 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. The Fund only receives Fund Components from the Authorized Participant and does not itself transact on any Digital Asset Markets. Therefore, the Fund 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. The Authorized Participant, as a related party of the Manager, provides information about the Digital Asset Markets on which it transacts to the Fund. In determining which of the eligible Digital Asset Markets is the Fund’s principal market for each Fund Component, the Fund reviews these criteria in the following order: • First, the Fund reviews a list of each Digital Asset Markets and excludes any Digital Asset Markets that are non-accessible to the Fund and the Authorized Participant(s). The Fund or the Authorized Participant does not have access to the 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 Fund sorts the remaining Digital Asset Markets from high to low by entity-specific and market-based volume and activity of each Fund Component traded on each Digital Asset Market in the trailing twelve months. • Third, the Fund 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. 15 • Fourth, the Fund then selects a Digital Asset Market as its principal market for such Fund Component based on the highest market volume, activity and price stability in comparison to the other Digital Asset Markets on the list. Based on information reasonably available to the Fund, Exchange Markets have the greatest volume and level of activity for the Fund Components. The Fund therefore looks to accessible Exchange Markets as opposed to the Brokered Market, Dealer Market and Principal-to-Principal Markets to determine its principal market for each Fund Component. As a result of the analysis, an Exchange Market has been selected as the Fund’s principal market for each Fund Component. The Fund determines its principal market for each Fund Component (or in the absence of a principal market the most advantageous market) annually and conducts a quarterly analysis to determine (i) if there have been recent changes to each Digital Asset Market’s trading volume and level of activity in the trailing twelve months, (ii) if any Digital Asset Markets have developed that the Fund has access to, or (iii) if recent changes to each Digital Asset Market’s price stability have occurred that would materially impact the selection of the principal market and necessitate a change in the Fund’s determination of its principal market for each Fund Component. The cost basis of the investment in each Fund Component recorded by the Fund for financial reporting purposes is the fair value of the Fund Component at the time of transfer. The cost basis recorded by the Fund may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors. Investment Company Considerations The Fund is an investment company for GAAP purposes and follows accounting and reporting guidance in accordance with the FASB ASC Topic 946, Financial Services —Investment Companies . The Fund uses fair value as its method of accounting for digital assets in accordance with its classification as an investment company for accounting purposes. The Fund is not a registered investment company under the Investment Company Act. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and these differences could be material. Review of Financial Results (unaudited) Financial Highlights for the three months ended September 30, 2021 and 2020 (All amounts in the following table and the subsequent paragraphs, except Share, per Share, each Fund Component and price of each Fund Component amounts, are in thousands) Three Months Ended September 30, 2021 2020 Net realized and unrealized gain on investments in digital assets $ 101,946 $ 7,907 Net increase in net assets resulting from operations $ 99,113 $ 7,532 Net assets $ 467,356 $ 85,840 Net realized and unrealized gain on investments in digital assets for the three months ended September 30, 2021 was $101,946, which includes a realized gain of $13,704 on the transfer of digital assets to pay the Manager’s Fee and net change in unrealized appreciation on investments in digital assets of $88,242. Net increase in net assets resulting from operations was $99,113 for the three months ended September 30, 2021, which consisted of the net realized and unrealized gain on investments in digital assets, less the Manager’s Fee of $2,833. Net assets increased to $467,356 at September 30, 2021, a 27% increase for the three-month period. The increase in net assets resulted from the contribution of approximately 13 BTC, 77 ETH, 13 BCH, 47 LTC, 310 LINK and 20,953 ADA with a total value of $935 to the Fund in connection with Share creations during the period, partially offset by the withdrawal of approximately 45 BTC, 262 ETH, 46 BCH, 160 LTC, 1,048 LINK and 70,759 ADA to pay the foregoing Manager’s Fee. Net realized and unrealized gain on investments in digital assets for the three months ended September 30, 2020 was $7,907, which includes a realized gain of $47 on the transfer of digital assets to pay the Manager’s Fee and net change in unrealized appreciation on investments in digital assets of $7,860. Net increase in net assets resulting from operations was $7,532 for the three months ended September 30, 2020, which consisted of the net realized and unrealized gain on investments in digital assets, less the Manager’s Fee of $375. Net assets increased to $85,840 at September 30, 2020, a 165% increase for the three-month period. The increase in net assets resulted from the contribution of approximately 3,404 BTC, 19,680 ETH, 3,425 BCH, 7,885,955 XRP and 11,123 LTC, with a total value of $45,934 to the Fund in connection with Share creations during the period, partially offset by the withdrawal of approximately 28 BTC, 159 ETH, 28 BCH, 63,728 XRP, and 90 LTC to pay the foregoing Manager’s Fee. Off-Balance Sheet Arrangements The Fund is not a party to any off-balance sheet arrangements. 16 Cash Resources and Liquidity The Fund has not had a cash balance at any time since inception. When selling Fund Components and/or Forked Assets to pay Additional Fund Expenses, the Manager endeavors to sell the exact number of Fund Components and/or Forked Assets needed to pay expenses in order to minimize the Fund’s holdings of assets other than the Fund Components. As a consequence, the Manager expects that the Fund will not record any cash flow from its operations and that its cash balance will be zero at the end of each reporting period. In exchange for the Manager’s Fee, the Manager has agreed to assume most of the expenses incurred by the Fund. As a result, the only ordinary expense of the Fund during the periods covered by this Quarterly Report was the Manager’s Fee. The Fund is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity needs. Selected Operating Data Three Months Ended September 30, 2021 2020 BTC: Opening balance 7,340 2,891 Creations 13 3,404 Portfolio rebalancing 1, 2, 3 (225 ) - Manager's Fee, related party (45 ) (28 ) Closing balance 7,083 6,267 Accrued but unpaid Manager's Fee, related party - - Net closing balance 7,083 6,267 ETH: Opening balance 45,288 16,713 Creations 77 19,680 Portfolio rebalancing 1, 2, 3 (3,622 ) - Manager's Fee, related party (262 ) (159 ) Closing balance 41,481 36,234 Accrued but unpaid Manager's Fee, related party - - Net closing balance 41,481 36,234 XRP: Opening balance - 6,697,006 Creations - 7,885,955 Portfolio rebalancing 1 - - Manager's Fee, related party - (63,728 ) Closing balance - 14,519,233 Accrued but unpaid Manager's Fee, related party - - Net closing balance - 14,519,233 BCH: Opening balance 7,380 2,910 Creations 13 3,425 Portfolio rebalancing 1, 2, 3 (68 ) - Manager's Fee, related party (46 ) (28 ) Closing balance 7,279 6,307 Accrued but unpaid Manager's Fee, related party - - Net closing balance 7,279 6,307 LTC: Opening balance 26,185 9,447 Creations 47 11,123 Portfolio rebalancing 1, 2, 3 (723 ) - Manager's Fee, related party (160 ) (90 ) Closing balance 25,349 20,480 Accrued but unpaid Manager's Fee, related party - - Net closing balance 25,349 20,480 17 LINK: Opening balance 153,328 - Creations 310 - Portfolio rebalancing 2, 3 13,460 - Manager's Fee, related party (1,048 ) - Closing balance 166,050 - Accrued but unpaid Manager's Fee, related party - - Net closing balance 166,050 - ADA: Opening balance - - Creations 20,953 - Portfolio rebalancing 3 11,256,633 - Manager's Fee, related party (70,759 ) - Closing balance 11,206,827 - Accrued but unpaid Manager's Fee, related party - - Net closing balance 11,206,827 - Number of Shares: Opening balance 15,837,800 6,029,000 Creations 29,600 7,141,200 Closing balance 15,867,400 13,170,200 As of September 30, 2021 2020 Prices of digital assets on principal market BTC $ 43,529.16 $ 10,708.57 ETH $ 2,992.38 $ 355.34 XRP 1 N/A $ 0.24 BCH $ 497.46 $ 225.60 LTC $ 151.61 $ 45.88 LINK 2 $ 23.51 N/A ADA 3 $ 2.10 N/A NAV per Share $ 29.45 $ 6.52 Digital Asset Reference Rates BTC $ 42,937.86 $ 10,748.51 ETH $ 2,954.78 $ 356.33 XRP 1 N/A $ 0.24 BCH $ 492.84 $ 227.97 LTC $ 149.77 $ 45.90 LINK 2 $ 23.64 N/A ADA 3 $ 2.09 N/A Digital Asset Holdings per Share $ 29.08 $ 6.54 (1) Effective January 4, 2021, the Fund removed XRP from the Fund’s portfolio and sold the XRP holdings to purchase additional tokens of the remaining Fund Components in proportion to their respective weightings . (2) Effective April 2, 2021, the Manager adjusted the Fund’s portfolio by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase Chainlink (LINK) in accordance with the Fund Construction Criteria . (3) Effective July 1, 2021, the Manager adjusted the Fund’s portfolio by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase Cardano (ADA) in accordance with the Fund Construction Criteria . 18 For accounting purposes, the Fund reflects creations and the Fund Components receivable with respect to such creations on the date of receipt of a notification of a creation but does not issue Shares until the requisite number of Fund Components is received. At this time , the Fund is not accepting redemption requests from shareholders. Subject to receipt of regulatory approval from the SEC and approval by the Manager in its sole discretion, the Fund may in the future operate a redemption program. The Fund currently has no intention of seeking regulatory approval to operate an ongoing redemption program. As of September 30, 2021, the Fund had a net closing balance with a value of $461,437,185, based on the Digital Asset Reference Rates (non-GAAP methodology). As of September 30, 2021, the Fund had a total market value of $467,355,932, based on the principal market prices. As of September 30, 2020, the Fund had a net closing balance with a value of $86,152,710, based on the Digital Asset Reference Rates (non-GAAP methodology). As of September 30, 2020, the Fund had a total market value of $85,839,958, based on the principal market prices. Historical Fund Component Prices As movements in the price of each Fund Component will directly affect the price of the Shares, investors should understand recent movements in the price of each Fund Component. Investors, however, should also be aware that past movements in each of the Fund Component prices are not indicators of future movements. Movements may be influenced by various factors, including, but not limited to, government regulation, security breaches experienced by service providers, as well as political and economic uncertainties around the world. The following chart illustrates the movement in the Digital Asset Holdings per Share (non-GAAP) versus the Fund’s GAAP NAV per Share from February 1, 2018 (the first Creation Basket of the Fund) to September 30, 2021. Bitcoin The Digital Asset Reference Rate for Bitcoin is an Index Price for Bitcoin. The following table illustrates the movements in the Index Price for Bitcoin from the beginning of the Fund’s operations on February 1, 2018 to September 30, 2021. Since the beginning of the Fund’s operations, the Index Price has ranged from $3,228.07 to $63,357.52, with the straight average being $15,845.05 through September 30, 2021. The Manager has not observed a material difference between the Index Price and average prices from the constituent Digital Asset Exchanges included in the relevant index individually or as a group. 19 High Low Period Average Index Price Date Index Price Date End of period Last business day February 1, 2018 to September 30, 2018 $ 7,717.13 $ 11,510.58 3/5/2018 $ 5,892.99 6/29/2018 $ 6,586.74 $ 6,664.78 Twelve months ended September 30, 2019 $ 6,613.53 $ 12,681.53 7/10/2019 $ 3,228.07 12/14/2018 $ 8,065.08 $ 8,065.08 Twelve months ended September 30, 2020 $ 8,874.05 $ 12,147.33 8/18/2020 $ 5,050.07 3/16/2020 $ 10,748.51 $ 10,748.51 Twelve months ended September 30, 2021 $ 37,455.59 $ 63,357.52 4/14/2021 $ 10,517.96 10/2/2020 $ 42,937.86 $ 42,937.86 February 1, 2018 to September 30, 2021 $ 15,845.05 $ 63,357.52 4/14/2021 $ 3,228.07 12/14/2018 $ 42,937.86 $ 42,937.86 The following table illustrates the movements in the Digital Asset Market price of Bitcoin, as reported on the Fund’s principal market for Bitcoin, from the beginning of the Fund’s operations on February 1, 2018 to September 30, 2021. Since the beginning of the Fund’s operations, the price of Bitcoin has ranged from $3,164.61 to $63,466.92, with the straight average being $15,885.72: High Low Period Average Digital Asset Market Price Date Digital Asset Market Price Date End of period Last business day February 1, 2018 to September 30, 2018 $ 7,737.60 $ 11,770.00 2/20/18 $ 5,879.99 6/29/18 $ 6,588.01 $ 6,675.09 Twelve months ended September 30, 2019 $ 6,637.57 $ 13,849.81 6/26/19 $ 3,164.61 12/14/18 $ 8,283.71 $ 8,283.71 Twelve months ended September 30, 2020 $ 8,882.90 $ 12,342.86 8/17/20 $ 4,950.39 3/16/20 $ 10,708.57 $ 10,708.57 Twelve months ended September 30, 2021 $ 37,558.18 $ 63,466.92 4/15/21 $ 10,515.13 10/2/20 $ 43,529.16 $ 43,529.16 February 1, 2018 to September 30, 2021 $ 15,885.72 $ 63,466.92 4/15/21 $ 3,164.61 12/14/18 $ 43,529.16 $ 43,529.16 Ethereum The Digital Asset Reference Rate for Ethereum is an Index Price for Ethereum. The following table illustrates the movements in the Index Price for Ethereum from the beginning of the Fund’s operations on February 1, 2018 to September 30, 2021. Since the beginning of the Fund’s operations, the Index Price has ranged from $84.31 to $4,190.44, with the straight average being $712.16 through September 30, 2021. The Manager has not observed a material difference between the Index Price and average prices from the constituent Digital Asset Exchanges included in the relevant index individually or as a group. High Low Period Average Index Price Date Index Price Date End of period Last business day February 1, 2018 to September 30, 2018 $ 524.98 $ 1,058.37 2/1/2018 $ 175.22 9/12/2018 $ 232.59 $ 226.56 Twelve months ended September 30, 2019 $ 179.49 $ 337.35 6/26/2019 $ 84.31 12/14/2018 $ 172.92 $ 172.92 Twelve months ended September 30, 2020 $ 222.93 $ 461.10 9/1/2020 $ 114.54 3/16/2020 $ 356.33 $ 356.33 Twelve months ended September 30, 2021 $ 1,859.52 $ 4,190.44 5/12/2021 $ 338.98 10/7/2020 $ 2,954.78 $ 2,954.78 February 1, 2018 to September 30, 2021 $ 712.16 $ 4,190.44 5/12/2021 $ 84.31 12/14/2018 $ 2,954.78 $ 2,954.78 The following table illustrates the movements in the Digital Asset Market price of Ethereum, as reported on the Fund’s principal market for Ethereum, from the beginning of the Fund’s operations on February 1, 2018 to September 30, 2021. Since the beginning of the Fund’s operations, the price of Ethereum has ranged from $82.34 to $4,089.92, with the straight average being $714.38: High Low Period Average Digital Asset Market Price Date Digital Asset Market Price Date End of period Last business day February 1, 2018 to September 30, 2018 $ 523.71 $ 1,013.98 2/1/18 $ 179.69 9/12/18 $ 232.47 $ 222.08 Twelve months ended September 30, 2019 $ 179.99 $ 350.76 6/26/19 $ 82.34 12/14/18 $ 178.13 $ 178.13 Twelve months ended September 30, 2020 $ 223.47 $ 476.23 9/1/20 $ 110.29 3/16/20 $ 355.34 $ 355.34 Twelve months ended September 30, 2021 $ 1,867.44 $ 4,089.92 5/12/21 $ 340.17 10/6/20 $ 2,992.38 $ 2,992.38 February 1, 2018 to September 30, 2021 $ 714.38 $ 4,089.92 5/12/21 $ 82.34 12/14/18 $ 2,992.38 $ 2,992.38 XRP The Digital Asset Reference Rate for XRP is an Index Price for XRP. The following table illustrates the movements in the Index Price for XRP from the beginning of the Fund’s operations on February 1, 2018 to January 3, 2021, after which XRP was removed from the Fund. Since the beginning of the Fund’s operations, the Index Price for XRP has ranged from $0.14 to $1.12, with the straight 20 average being $0.36 through January 3, 2021. The Manager has not observed a material difference between the Index Price and average prices from the constituent Digital Asset Exchanges included in the relevant index individually or as a group. High Low Period Average Index Price Date Index Price Date End of period Last business day February 1, 2018 to September 30, 2018 $ 0.59 $ 1.12 2/15/2018 $ 0.26 9/12/2018 $ 0.54 $ 0.54 Twelve months ended September 30, 2019 $ 0.35 $ 0.57 10/1/2018 $ 0.24 9/27/2019 $ 0.25 $ 0.25 Twelve months ended September 30, 2020 $ 0.23 $ 0.33 2/14/2020 $ 0.14 3/16/2020 $ 0.24 $ 0.24 October 1, 2020 to January 3, 2021 $ 0.36 $ 0.67 11/25/2020 $ 0.21 12/30/2020 $ 0.22 $ 0.22 February 1, 2018 to January 3, 2021 $ 0.36 $ 1.12 2/15/2018 $ 0.14 3/16/2020 $ 0.22 $ 0.22 The following table illustrates the movements in the Digital Asset Market price of XRP, as reported on the Fund’s principal market for XRP, from the beginning of the Fund’s operations on February 1, 2018 to January 3, 2021. Since the beginning of the Fund’s operations, the price of XRP has ranged from $0.14 to $1.17, with the straight average being $0.36: High Low Period Average Digital Asset Market Price Date Digital Asset Market Price Date End of period Last business day February 1, 2018 to September 30, 2018 $ 0.60 $ 1.17 2/17/18 $ 0.26 9/11/18 $ 0.58 $ 0.54 Twelve months ended September 30, 2019 $ 0.35 $ 0.55 10/2/18 $ 0.24 9/29/19 $ 0.26 $ 0.26 Twelve months ended September 30, 2020 $ 0.23 $ 0.33 2/14/20 $ 0.14 3/16/20 $ 0.24 $ 0.24 October 1, 2020 to January 3, 2021 $ 0.36 $ 0.71 11/24/20 $ 0.21 12/29/20 $ 0.23 $ 0.23 February 1, 2018 to January 3, 2021 $ 0.36 $ 1.17 2/17/18 $ 0.14 3/16/20 $ 0.23 $ 0.23 Effective January 4, 2021, the Fund removed XRP from the Fund’s portfolio and sold the XRP holdings to purchase additional tokens of the remaining Fund Components in proportion to their respective weightings. See “Item 1. Financial Statements and Exhibits – Note 4. Portfolio Rebalancing” for a description of the portfolio rebalancing. Bitcoin Cash The Digital Asset Reference Rate for Bitcoin Cash is an Index Price for Bitcoin Cash. The following table illustrates the movements in the Index Price for Bitcoin Cash from the beginning of the Fund’s operations on February 1, 2018 to September 30, 2021. Since the beginning of the Fund’s operations, the Index Price Bitcoin Cash has ranged from $83.82 to $1,646.79, with the straight average being $457.13 through September 30, 2021. The Manager has not observed a material difference between the Index Price and average prices from the constituent Digital Asset Exchanges included in the relevant index individually or as a group. High Low Period Average Index Price Date Index Price Date End of period Last business day February 1, 2018 to September 30, 2018 $ 903.60 $ 1,646.79 5/7/2018 $ 425.98 9/18/2018 $ 549.95 $ 549.95 Twelve months ended September 30, 2019 $ 282.74 $ 619.64 11/7/2018 $ 83.82 12/14/2018 $ 223.60 $ 223.60 Twelve months ended September 30, 2020 $ 259.44 $ 483.25 2/14/2020 $ 164.44 3/13/2020 $ 227.97 $ 227.97 Twelve months ended September 30, 2021 $ 533.73 $ 1,505.55 5/12/2021 $ 219.49 10/2/2020 $ 492.84 $ 492.84 February 1, 2018 to September 30, 2021 $ 457.13 $ 1,646.79 5/7/2018 $ 83.82 12/14/2018 $ 492.84 $ 492.84 The following table illustrates the movements in the Digital Asset Market price of Bitcoin Cash, as reported on the Fund’s principal market for Bitcoin Cash, from the beginning of the Fund’s operations on February 1, 2018 to September 30, 2021. Since the beginning of the Fund’s operations, the price of Bitcoin Cash has ranged from $76.78 to $1,719.00, with the straight average being $457.89: High Low Period Average Digital Asset Market Price Date Digital Asset Market Price Date End of period Last business day February 1, 2018 to September 30, 2018 $ 905.45 $ 1,719.00 5/6/18 $ 417.62 9/17/18 $ 530.02 $ 542.60 Twelve months ended September 30, 2019 $ 284.83 $ 611.87 11/7/18 $ 76.78 12/15/18 $ 226.36 $ 226.36 Twelve months ended September 30, 2020 $ 258.96 $ 493.09 2/14/20 $ 168.00 3/16/20 $ 225.60 $ 225.60 Twelve months ended September 30, 2021 $ 533.69 $ 1,465.48 5/6/21 $ 217.41 10/2/20 $ 497.46 $ 497.46 February 1, 2018 to September 30, 2021 $ 457.89 $ 1,719.00 5/6/18 $ 76.78 12/15/18 $ 497.46 $ 497.46 21 Litecoin The Digital Asset Reference Rate for Litecoin is an Index Price for Litecoin. The following table illustrates the movements in the Index Price from the beginning of the Fund’s operations on February 1, 2018 to September 30, 2021. Since the beginning of the Fund’s operations, the Index Price for Litecoin has ranged from $22.81 to $391.06, with the straight average being $95.55 through September 30, 2021. The Manager has not observed a material difference between the Index Price for Litecoin and average prices from the constituent Digital Asset Exchanges included in the relevant index individually or as a group. High Low Period Average Index Price Date Index Price Date End of period Last business day February 1, 2018 to September 30, 2018 $ 115.26 $ 239.52 2/20/2018 $ 49.79 9/12/2018 $ 62.79 $ 62.79 Twelve months ended September 30, 2019 $ 66.50 $ 138.93 6/12/2019 $ 22.81 12/14/2018 $ 54.88 $ 54.88 Twelve months ended September 30, 2020 $ 50.58 $ 81.27 2/13/2020 $ 32.75 3/13/2020 $ 45.90 $ 45.90 Twelve months ended September 30, 2021 $ 156.62 $ 391.06 5/10/2021 $ 45.21 10/3/2020 $ 149.77 $ 149.77 February 1, 2018 to September 30, 2021 $ 95.55 $ 391.06 5/10/2021 $ 22.81 12/14/2018 $ 149.77 $ 149.77 The following table illustrates the movements in the Digital Asset Market price of Litecoin, as reported on the Fund’s principal market for Litecoin, from the beginning of the Fund’s operations on February 1, 2018 to September 30, 2021. Since the beginning of the Fund’s operations, the price of Litecoin has ranged from $22.47 to $371.96, with the straight average being $95.74: High Low Period Average Digital Asset Market Price Date Digital Asset Market Price Date End of period Last business day February 1, 2018 to September 30, 2018 $ 115.59 $ 242.51 2/20/18 $ 51.26 9/11/18 $ 60.91 $ 61.70 Twelve months ended September 30, 2019 $ 66.77 $ 141.89 6/22/19 $ 22.47 12/14/18 $ 55.71 $ 55.71 Twelve months ended September 30, 2020 $ 50.69 $ 82.52 2/14/20 $ 32.27 3/16/20 $ 45.88 $ 45.88 Twelve months ended September 30, 2021 $ 156.73 $ 371.96 5/11/21 $ 44.75 10/2/20 $ 151.61 $ 151.61 February 1, 2018 to September 30, 2021 $ 95.74 $ 371.96 5/11/21 $ 22.47 12/14/18 $ 151.61 $ 151.61 Chainlink The Digital Asset Reference Rate for Chainlink is an Index Price for Chainlink. The following table illustrates the movements in the Index Price from the addition of the token to the Fund’s portfolio on April 2, 2021 to September 30, 2021. Since the token was added to the Fund’s portfolio, the Index Price for Chainlink has ranged from $13.81 to $50.40, with the straight average being $27.55 through September 30, 2021. The Manager has not observed a material difference between the Index Price for Chainlink and average prices from the constituent Digital Asset Exchanges included in the relevant index individually or as a group. High Low Period Average Index Price Date Index Price Date End of period Last business day April 2, 2021 to September 30, 2021 $ 27.55 $ 50.40 5/10/2021 $ 13.81 7/20/2021 $ 23.64 $ 23.64 The following table illustrates the movements in the Digital Asset Market price of Chainlink, as reported on the Fund’s principal market for Chainlink, from the addition of the token to the Fund’s portfolio on April 2, 2021 to September 30, 2021. Since the addition of the token to the Fund’s portfolio, the price of Chainlink has ranged from $13.99 to $50.43, with the straight average being $27.58: High Low Period Average Digital Asset Market Price Date Digital Asset Market Price Date End of period Last business day April 2, 2021 to September 30, 2021 $ 27.58 $ 50.43 5/9/21 $ 13.99 7/20/21 $ 23.51 $ 23.51 Effective April 2, 2021, the Manager adjusted the Fund’s portfolio in connection with its quarterly review by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase Chainlink in accordance with the Fund Construction Criteria. See “Item 1. Financial Statements and Exhibits – Note 4. Portfolio Rebalancing” for a description of the portfolio rebalancing. 22 Cardano The Digital Asset Reference Rate for Cardano is an Index Price for Cardano. The following table illustrates the movements in the Index Price from the addition of the token to the Fund’s portfolio on July 1, 2021 to September 30, 2021. Since the token was added to the Fund’s portfolio, the Index Price for Cardano has ranged from $1.07 to $2.98, with the straight average being $1.93 through September 30, 2021. The Manager has not observed a material difference between the Index Price for Cardano and average prices from the constituent Digital Asset Exchanges included in the relevant index individually or as a group. High Low Period Average Index Price Date Index Price Date End of period Last business day July 1, 2021 to September 30, 2021 $ 1.93 $ 2.98 9/2/2021 $ 1.07 7/20/2021 $ 2.09 $ 2.09 The following table illustrates the movements in the Digital Asset Market price of Cardano, as reported on the Fund’s principal market for Cardano, from the addition of the token to the Fund’s portfolio on July 1, 2021 to September 30, 2021. Since the addition of the token to the Fund’s portfolio, the price of Cardano has ranged from $1.08 to $2.99, with the straight average being $1.94: High Low Period Average Digital Asset Market Price Date Digital Asset Market Price Date End of period Last business day July 1, 2021 to September 30, 2021 $ 1.94 $ 2.99 9/3/21 $ 1.08 7/20/21 $ 2.10 $ 2.10 Effective July 1, 2021, the Manager adjusted the Fund’s portfolio in connection with its quarterly review by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase Cardano in accordance with the Fund Construction Criteria. See “Item 1. Financial Statements and Exhibits – Note 4. Portfolio Rebalancing” for a description of the portfolio rebalancing. The following chart sets out the historical closing prices for the Shares as reported by OTCQX and the Fund’s Digital Asset Holdings per Share. GDLC Premium/(Discount): GDLC Share Price vs. Digital Asset Holdings per Share ($) 23 The following chart sets out the historical premium and discount for the Shares as reported by OTCQX and the Fund’s Digital Asset Holdings per Share. GDLC Premium/(Discount): GDLC Share Price vs. Digital Asset Holdings per Share (%) 24