Item 5. Market for Registrant’s Common Equity
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
On January 11, 2024, the Shares commenced trading on NASDAQ under the ticker symbol IBIT.
Holders
As of December 31, 2024, there were approximately 163 DTC participating shareholders of record of the Trust. Because most of the Trust’s Shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders.
Dividends
The Trust did not declare any cash distributions to Shareholders during the period from October 27, 2023 to December 31, 2023 and the fiscal year ended December 31, 2024. The Trust has no obligation to make periodic distributions to Shareholders.
Use of Proceeds from Registered Securities
Not applicable.
Purchases of Equity Securities by the Issuers and Affiliated Purchaser
9,280,000 Shares (232 Baskets) were redeemed during the fourth quarter of the year ended December 31, 2024.
Period
Total Number of Shares
Redeemed
Average Price
Paid Per Share
10/01/24 to 10/31/24
720,000
$
34.12
11/01/24 to 11/30/24
2,720,000
41.67
12/01/24 to 12/31/24
5,840,000
55.03
Total
9,280,000
$
49.49
Item 6. [Reserved]
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.
This information should be read in conjunction with the financial statements and notes to financial statements included with this report. The discussion and analysis that follows may contain statements that relate to future events or future performance. In some cases, such forward-looking statements can be identified by terminology such as “may,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. These statements are based upon certain assumptions and analyses made by the Sponsor on the basis of its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. Whether or not actual results and developments will conform to the Sponsor’s expectations and predictions, however, is subject to a number of risks and uncertainties, including the special considerations discussed below, general economic, market and business conditions, changes in laws or regulations, including those concerning taxes, made by governmental authorities or regulatory bodies, and other world economic and political developments. Although the Sponsor does not make forward-looking statements unless it believes it has a reasonable basis for doing so, the Sponsor cannot guarantee their accuracy. Except as required by applicable disclosure laws, neither the Trust nor the Sponsor is under a duty to update any of the forward-looking statements to conform such statements to actual results or to a change in the Sponsor’s expectations or predictions.
Introduction
The Trust is a Delaware statutory trust. The Trust does not have any officers, directors, or employees, and is administered by the Second Amended and Restated Trust Agreement dated as of December 28, 2023, among the Sponsor, the Trustee and the Delaware Trustee, as amended by Amendment No. 1 thereto, with effect from August 8, 2024. The Trust issues Shares representing fractional undivided beneficial interests in its net assets. The assets of the Trust consist primarily of bitcoin held by a custodian on behalf of the Trust.
The Trust is a passive investment vehicle and seeks to reflect generally the performance of the price of bitcoin. The Trust seeks to reflect such performance before payment of the Trust’s expenses and liabilities. The Trust does not engage in any activities designed to obtain a profit from, or ameliorate losses caused by, changes in the price of bitcoin.
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The Trust issues and redeems Shares only in Baskets of 40,000 Shares or integral multiples thereof, based on the quantity of bitcoin attributable to each Share (net of accrued but unpaid Sponsor’s Fee and any accrued but unpaid expenses or liabilities). Baskets may be redeemed by the Trust in exchange for the cash proceeds from selling the amount of bitcoin corresponding to their redemption value.
Shares of the Trust trade on NASDAQ under the ticker symbol IBIT.
Valuation of Bitcoin ; The CF Benchmarks Index
On each Business Day, as soon as practicable after 4:00 p.m. ET, the Trust evaluates the bitcoin held by the Trust as reflected by the CF Benchmarks Index and determines the net asset value of the Trust and the NAV. For purposes of making these calculations, a Business Day means any day other than a day when NASDAQ is closed for regular trading. CF Benchmarks Index is calculated as of 4:00 p.m. ET. The CF Benchmarks Index is designed based on the IOSCO Principles for Financial Benchmarks and is a Registered Benchmark under the UK BMR. The Index Administrator is a UK incorporated company authorized and regulated by the FCA of the UK as a Benchmark Administrator under the UK BMR.
Liquidity
The Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity needs. In exchange for a fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust. For the period covered by this report, the Trust did not incur any Sponsor’s Fee. The Trust’s only source of liquidity is its sales of bitcoin.
Critical Accounting Policies
The financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States of America. The preparation of these financial statements relies on estimates and assumptions that impact the Trust’s financial position and results of operations. These estimates and assumptions affect the Trust’s application of accounting policies. In addition, please refer to Note 2 to the financial statements included in this report for further discussion of the Trust’s accounting policies.
Valuation of Bitcoin
The following chart shows the daily Bitcoin price, as applicable for the period January 5, 2024 through December 31, 2024:
Bitcoin Prices (January 2024 - December 2024)
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Results of Operations
The Year Ended December 31, 2024
The Trust’s net asset value grew from $100,000 at December 31, 2023 to $51,519,566,547 at December 31, 2024. The increase in the Trust’s net asset value resulted primarily from an increase in the number of outstanding Shares, which rose from 4,000 Shares at December 31, 2023 to 970,440,000 Shares at December 31, 2024, a consequence of 982,160,000 Shares (24,554 Baskets) being created and 11,724,000 Shares (293 Baskets plus the original 4,000 seed Shares) being redeemed during the period. The increase in the Trust’s net asset value also benefited from an increase in the price of bitcoin, which rose 112.78% from the Trust’s first bitcoin purchase at $43,878.41 on January 5, 2024 to $93,365.36 at December 31, 2024.
The 112.36% increase in the NAV for purposes of the Trust’s periodic financial statements (“Financial Statement NAV”) from $25.00 at December 31, 2023 to $53.09 at December 31, 2024 is directly related to the 112.78% increase in the price of bitcoin. The Financial Statement NAV increased slightly less than the price of bitcoin on a percentage basis due to the Sponsor’s Fee, which was $47,498,665 for the period, or 0.22% of the Trust’s average weighted assets of $21,516,137,559 during the period.
The NAV of $60.57 on December 17, 2024 was the highest during the period, compared with a low during the period of $22.36 on January 23, 2024.
Net increase in net assets resulting from operations for the year ended December 31, 2024 was $14,232,135,930, resulting from an unrealized gain on investment in bitcoin of $14,157,070,942, a net realized gain of $18,811,883 from bitcoin sold to pay expenses and a net realized gain of $103,751,770 from bitcoin sold for the redemption of Shares, partially offset by a net investment loss of $47,498,665. Other than the net Sponsor’s Fee of $47,498,665, the Trust had no expenses during the period.
The Year Ended December 31, 2023
At December 31, 2023, the Trust had no operations other than a sale to BlackRock Financial Management, Inc., the Seed Capital Investor, of 4,000 shares of common stock for $100,000 ($25.00 per share).
On January 5, 2024, the Seed Shares were redeemed for cash and the Seed Capital Investor purchased the Seed Creation Baskets, comprising of 400,000 Shares at a per-Share price of $25.00. Total proceeds to the Trust from the sale of the Seed Creation Baskets were $10,000,000. On January 5, 2024, the Trust purchased 227.90250 bitcoin with the proceeds of the Seed Creation Baskets using the Prime Execution Agent.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.