What changed in this filing

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Item 1. Business

2026-02-27 compared with 2025-03-05 · 126 added, 81 removed, 592 unchanged (26% of the section changed)

The iShares Bitcoin Trust ETF (the “Trust”) was formed as a Delaware statutory trust on June 8, 2023.

The Trust is governed by the Second Amended and Restated Trust Agreement dated as of December 28, 2023 (the “Trust Agreement”), as amended by Amendment No.

1 thereto, with effect from August 8, 2024.

The Trust is governed by the provisions of the Third Amended and Restated Trust Agreement (the “Trust Agreement”) executed by iShares Delaware Trust Sponsor LLC, as sponsor (the “Sponsor”), BlackRock Fund Advisors, as trustee (the “Trustee”), and Wilmington Trust, National Association, as Delaware trustee (the “Delaware Trustee”), dated as of June 27, 2025.

The purpose of the Trust is to own bitcoin purchased by the Trust in exchange for the shares issued by the Trust (the “Shares”).

Each Share represents a fractional undivided beneficial interest in the net assets of the Trust.

The owners of the beneficial interests of Shares are the “Shareholders.” The assets of the Trust consist primarily of bitcoin held by a custodian on behalf of the Trust, pursuant to the Custodial Services Agreement (the “Custodian Agreement”).

The sponsor of the Trust is iShares Delaware Trust Sponsor LLC (the “Sponsor”), a Delaware limited liability company and an indirect subsidiary of BlackRock, Inc.

The owners of the beneficial interests in the Shares are the “Shareholders.” The assets of the Trust consist primarily of bitcoin held by a custodian on behalf of the Trust.

The Sponsor and the Trustee are consolidated subsidiaries of BlackRock, Inc.

(“BlackRock”).

BlackRock Fund Advisors (the “Trustee”) is the trustee of the Trust;

Coinbase Custody Trust Company, LLC (the “Bitcoin Custodian”) is the custodian for the Trust’s bitcoin holdings;

Coinbase Custody Trust Company, LLC serves as the custodian for the Trust’s bitcoin holdings (the “Bitcoin Custodian”);

Anchorage Digital Bank N.A.

serves as an additional available custodian for the Trust’s bitcoin holdings (the “Additional Bitcoin Custodian”);

Coinbase, Inc.

(“Coinbase Inc.” or the “Prime Execution Agent”), an affiliate of the Bitcoin Custodian, is the prime execution agent;

and The Bank of New York Mellon is the custodian for the Trust’s cash holdings (the “Cash Custodian” and together with the Bitcoin Custodian, the “Custodians”) and the administrator of the Trust (the “Trust Administrator”).

Wilmington Trust Company, a Delaware trust company, serves as the Delaware trustee of the Trust (the “Delaware Trustee”).

The Trust’s net asset value grew from $100,000 at December 31, 2023 to $51,519,566,547 at December 31, 2024, the Trust’s fiscal year end.

Outstanding Shares of the Trust rose from 4,000 Shares at December 31, 2023 to 970,440,000 Shares outstanding at December 31, 2024.

The activities of the Trust are limited to (1) issuing blocks of 40,000 Shares (a “Basket”) in exchange for the cash deposited with the Cash Custodian as consideration, (2) selling or delivering bitcoin, as necessary to cover the renumeration due to the Sponsor (the “Sponsor’s Fee”), Trust expenses not assumed by the Sponsor and other liabilities and (3) buying and selling bitcoin through the designated third parties who are not registered broker-dealers and transact in bitcoin pursuant to written agreements with the Trust (each, a “Bitcoin Trading Counterparty” and each written agreement, a “Bitcoin Trading Counterparty Agreement”) or Prime Execution Agent, as applicable, in exchange for Baskets in connection with creation and redemption.

(“Coinbase Inc.” or the “Prime Execution Agent”), an affiliate of the Bitcoin Custodian, serves as the Trust’s prime execution agent;

and The Bank of New York Mellon serves as the custodian for the Trust’s cash holdings (the "Cash Custodian”) and as the administrator of the Trust (the “Trust Administrator”).

The Bitcoin Custodian, the Additional Bitcoin Custodian, and the Cash Custodian are collectively referred to as the “Custodians.”

The Trust’s net asset value increased from $51,519,566,547 at December 31, 2024 to $67,401,155,244 at December 31, 2025, the Trust’s fiscal year end.

Outstanding Shares of the Trust increased from 970,440,000 Shares at December 31, 2024 to 1,358,680,000 Shares outstanding at December 31, 2025.

The activities of the Trust are limited to (1) issuing blocks of 40,000 Shares (a “Basket”) in exchange for the cash deposited with the Cash Custodian as consideration, (2) selling or delivering bitcoin, as necessary to cover the remuneration due to the Sponsor (the “Sponsor’s Fee”), Trust expenses not assumed by the Sponsor and other liabilities and (3) buying and selling bitcoin through the designated third parties who are not registered broker-dealers and transact in bitcoin pursuant to written agreements with the Trust (each, a “Bitcoin Trading Counterparty” and each written agreement, a “Bitcoin Trading Counterparty Agreement”) or the Prime Execution Agent, as applicable, in exchange for Baskets in connection with creation and redemption.

The Trust is not actively managed.

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The hardware, software, systems, and procedures of the Bitcoin Custodian may not be available or cost-effective for many investors to access directly.

The Trust’s bitcoin holdings and cash holdings from time to time may be held with the Prime Execution Agent, in the Trading Balance, in connection with creations and redemptions of Baskets, and the sale of bitcoin to pay the Sponsor’s Fee and any other Trust expenses not assumed by the Sponsor, to the extent applicable, and in extraordinary circumstances, in connection with the liquidation of the Trust’s bitcoin.

The Trust’s bitcoin holdings and cash holdings from time to time may be held with the Prime Execution Agent, an affiliate of the Bitcoin Custodian, in the Trading Balance, in connection with creations and redemptions of Baskets, the sale of bitcoin to pay the Sponsor’s Fee and any other Trust expenses not assumed by the Sponsor, to the extent applicable, and in extraordinary circumstances, in connection with the liquidation of the Trust’s bitcoin.

These periodic holdings held in the Trading Balance with the Prime Execution Agent represent an omnibus claim on the Prime Execution Agent’s bitcoin (and cash) held on behalf of clients;

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Investors may purchase and sell Shares through traditional securities brokerage accounts, and can avoid the complexities of handling bitcoin directly (e.g., managing wallets and public and private keys themselves, or interfacing with a trading platform), which some investors may not prefer or may find unfamiliar.

The Shares are listed and traded on Nasdaq Stock Market LLC (“NASDAQ”) under the ticker symbol “IBIT.”

The Shares are listed and traded on The Nasdaq Stock Market LLC (“NASDAQ”) under the ticker symbol “IBIT.”

The Trust and the Sponsor face competition with respect to the creation of competing exchange-traded bitcoin products.

There can be no assurance that the Trust will achieve initial market acceptance and scale due to competition.

There can be no assurance that the Trust will achieve market acceptance and scale due to competition.

Secondary Market Trading

While the Trust seeks to reflect generally the performance of the price of bitcoin before the payment of the Trust’s expenses and liabilities, Shares may trade at, above or below their net asset value per Share (the “NAV”).

While the Trust seeks to reflect generally the performance of the price of bitcoin before the payment of the Trust’s expenses and liabilities, Shares may trade at, above or below their NAV.

The NAV will fluctuate with changes in the market value of the Trust’s assets.

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Eastern Time Zone (“ET”), liquidity in the market for bitcoin may be reduced, negatively affecting the trading volume;

alternatively, developments in bitcoin markets (which operate around the clock), including the price volatility, declines in trading volumes, and the closing of bitcoin trading platforms due to fraud, failures, security breaches or otherwise that occur outside of NASDAQ trading hours will not be reflected in trading prices of the Shares until trading on the NASDAQ opens.

alternatively, developments in bitcoin markets (which operate around the clock), including price volatility, declines in trading volumes, and the closing of bitcoin trading platforms due to fraud, failures, security breaches or otherwise that occur outside of NASDAQ trading hours will not be reflected in trading prices of the Shares until trading on the NASDAQ opens.

As a result, during this time, trading spreads, and the resulting premium or discount, on Shares may widen.

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The Services Agreement is governed by the laws of the State of New York.

The Bitcoin Custodian

The Bitcoin Custodian for the Trust’s bitcoin holdings is Coinbase Custody Trust Company, LLC, and the Trust has entered into the Custodian Agreement with the Bitcoin Custodian.

The Bitcoin Custodian and Additional Bitcoin Custodian

The Bitcoin Custodian for the Trust’s bitcoin holdings is Coinbase Custody Trust Company, LLC, and the Additional Bitcoin Custodian for the Trust’s bitcoin holdings is Anchorage Digital Bank N.A.

The Trust has entered into the Custodian Agreement with the Bitcoin Custodian and the Anchorage Custodian Agreement with the Additional Bitcoin Custodian.

The Sponsor may, in its sole discretion, add or terminate bitcoin custodians.

The Sponsor may, in its sole discretion, change the custodian for the Trust’s bitcoin holdings, but it will have no obligation whatsoever to do so or to seek any particular terms for the Trust from other such custodians.

Coinbase Custody - The Bitcoin Custodian

The Bitcoin Custodian keeps custody of all of the Trust’s bitcoin held by the Bitcoin Custodian in segregated accounts in the Vault Balance, other than the Trust’s bitcoin which is temporarily maintained in the Trading Balance with the Prime Execution Agent as described below in “The Prime Execution Agent and The Trade Credit Lender—The Prime Execution Agent.” Trust assets held in the Vault Balance are held in segregated wallets, and are not commingled with the Bitcoin Custodian’s or its affiliates’ assets, or the assets of the Bitcoin Custodian’s other customers.

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The Bitcoin Custodian may receive deposits of bitcoin but may not send bitcoin without use of the corresponding private keys.

Such private keys are stored in cold storage facilities within the United States and Europe, exact locations of which are not disclosed for security reasons.

Such private keys are stored in cold storage facilities within the United States and Europe, the exact locations of which are not disclosed for security reasons.

A limited number of employees at the Bitcoin Custodian are involved in private key management operations, and the Bitcoin Custodian has represented that no single individual has access to full private keys.

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Coinbase Global Inc.

(“Coinbase Global”), the parent company of the Bitcoin Custodian, the Prime Broker and the Trade Credit Lender (“Coinbase Global”) maintains a commercial crime insurance policy of up to $320 million, which is intended to cover the loss of client assets held by Coinbase Global and its subsidiaries, referred to as the “Coinbase Insureds,” including from employee collusion or fraud, physical loss including theft, damage of key material, security breach or hack, and fraudulent transfer.

The insurance maintained by Coinbase Global is shared among all of Coinbase’s customers, is not specific to the Trust or to customers holding bitcoin with the Bitcoin Custodian or Prime Execution Agent and may not be available or sufficient to protect the Trust from all possible losses or sources of losses.

In the event of a fork, the Custodian Agreement provides that the Bitcoin Custodian may temporarily suspend services, and may, in their sole discretion, determine whether or not to support (or cease supporting) either branch of the forked protocol entirely, provided that the Bitcoin Custodian shall use commercially reasonable efforts to avoid ceasing to support both branches of such forked protocol and will support, at a minimum, the original digital asset.

(“Coinbase Global”), the parent company of the Bitcoin Custodian, the Prime Broker and the Trade Credit Lender (“Coinbase Global”) maintains a commercial crime insurance policy, which is intended to cover the loss of client assets held by Coinbase Global and its subsidiaries, referred to as the “Coinbase Insureds,” including losses arising from employee collusion or fraud, physical loss including theft, damage of key material, security breach or hack, and fraudulent transfer.

The insurance maintained by Coinbase Global is shared among all of Coinbase’s customers, is not specific to the Trust or to customers holding bitcoin with the Bitcoin Custodian or the Prime Execution Agent and may not be available or sufficient to protect the Trust from all possible losses or sources of losses.

In the event of a fork, the Custodian Agreement provides that the Bitcoin Custodian may temporarily suspend services, and may, in its sole discretion, determine whether or not to support (or cease supporting) either branch of the forked protocol entirely, provided that the Bitcoin Custodian shall use commercially reasonable efforts to avoid ceasing to support both branches of such forked protocol and will support, at a minimum, the original digital asset.

The Custodian Agreement provides that, other than as set forth therein, and provided that the Bitcoin Custodian shall make commercially reasonable efforts to assist the Trust to retrieve and/or obtain any assets related to a fork, airdrop or similar event the Bitcoin Custodian shall have no liability, obligation or responsibility whatsoever arising out of or relating to the operation of the underlying software protocols relating to the Bitcoin blockchain and any digital asset network, including the Bitcoin peer-to-peer network (the “Bitcoin network”) or an unsupported branch of a forked protocol and, accordingly, the Trust acknowledges and assumes the risk of the same.

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The Trust has no right to receive any Incidental Right or IR Digital Asset.

Furthermore, the Custodian has no authority, pursuant to the Custodian Agreement or otherwise, to exercise, obtain or hold, as the case may be, any such abandoned Incidental Right or IR Digital Asset on behalf of the Trust or to transfer any such abandoned Incidental Right or IR Digital Asset to the Trust if the Trust terminates its custodial arrangement with the Custodian.

Furthermore, the Bitcoin Custodian has no authority, pursuant to the Custodian Agreement or otherwise, to exercise, obtain or hold, as the case may be, any such abandoned Incidental Right or IR Digital Asset on behalf of the Trust or to transfer any such abandoned Incidental Right or IR Digital Asset to the Trust if the Trust terminates its custodial arrangement with the Custodian.

For more information on the Trust’s and Sponsor’s policies on forked or airdropped assets, see Item 1A.

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In addition, Shareholders will not receive the benefits of any Incidental Rights and any IR Digital Asset, including any forked or airdropped assets.” Neither the Bitcoin Custodian nor any other Coinbase entity is permitted to withdraw the Trust’s bitcoin from the Trust’s Vault Balance, or loan, hypothecate, pledge or otherwise encumber the Trust’s bitcoin, without the consent of the Trust.

The Vault Balance is subject to the lien to secure outstanding trade credits (“Trade Credits”) in favor of Coinbase Credit, Inc.

The Vault Balance is subject to a lien to secure outstanding trade credits (“Trade Credits”) in favor of Coinbase Credit, Inc.

(the “Trade Credit Lender”) on a short-term basis pursuant to the Coinbase Credit Committed Trade Financing Agreement (the “Trade Financing Agreement”).

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These termination provisions are described in more detail in “The Prime Execution Agent and The Trade Credit Lender—The Prime Execution Agent” below.

Anchorage - The Additional Bitcoin Custodian

The Additional Bitcoin Custodian is Anchorage Digital Bank N.A., a national trust bank regulated by the Office of the Comptroller of the Currency (the “OCC”).

As of the date of this prospectus, the Sponsor has no plans to move any of the Trust’s bitcoin to the Additional Bitcoin Custodian, though such plans are subject to ongoing review.

If the Sponsor chooses to utilize the Additional Bitcoin Custodian in the future, the Additional Bitcoin Custodian will receive bitcoin for storage in the Trust’s account at the Additional Bitcoin Custodian by generating private keys and their public key pairs, with the Additional Bitcoin Custodian retaining custody of such private keys.

Upon receipt, the Additional Bitcoin Custodian would keep custody of all of the Trust’s bitcoin that it holds in segregated accounts (“Anchorage Vault Balance”).

Trust assets held in the Anchorage Vault Balance would be held in segregated wallets and would not be commingled with the Additional Bitcoin Custodian’s or its affiliates’ assets, or the assets of the Additional Bitcoin Custodian’s other customers.

The Anchorage Vault Balance would be held at the Bitcoin blockchain addresses at which only the Trust’s assets are held.

Anchor Labs maintains crime insurance coverage for a minimum limit of $100 million, which is intended to cover the loss of Trust assets held by the Anchor Labs Insureds, including from dishonest or fraudulent acts committed by the Anchor Labs Insureds’ employees, their agents and subcontractors;

forgery and alteration;

computer crime;

wire transfer coverage;

physical damage or theft of private key data;

social engineering coverage;

and security breaches or hacking.

The insurance maintained by Anchor Labs may be shared among Anchor Labs Insureds’ other customers, is not necessarily exclusive to the Trust or to customers holding bitcoin with Anchorage and may not be available or sufficient to protect the Trust from all possible losses or sources of losses.

Anchor Labs’ insurance may not cover the type of losses experienced by the Trust.

Alternatively, the Trust may be forced to share such insurance proceeds with other clients or customers of the Anchorage Labs Insureds, which could reduce the amount of such proceeds that are available to the Trust.

In addition, the bitcoin insurance market is limited, and the level of insurance maintained by Anchorage may be substantially lower than the assets of the Trust.

While Anchorage maintains certain capital reserve requirements depending on the assets under custody, and such capital reserves may provide additional means to cover client asset losses, the Trust cannot be assured that Anchorage will maintain capital reserves sufficient to cover actual or potential losses with respect to the Trust’s digital assets.

The insurance program does not cover, insure or guarantee the performance of the Trust.

In the event of a fork, the Anchorage Custodian Agreement provides that the Additional Bitcoin Custodian may temporarily suspend services, and may, in its sole discretion, determine whether or not to support (or cease supporting) either branch of the forked protocol entirely, provided that the Additional Bitcoin Custodian would use commercially reasonable efforts to timely select, in its sole discretion, at least one branch of such forked protocol to support.

The Sponsor has committed to cause the Trust to permanently and irrevocably abandon any Incidental Rights and IR Digital Asset to which the Trust may become entitled in the future.

The Trust has no right to receive any Incidental Right or IR Digital Asset.

With respect to the Anchorage Custodian Agreement, other than with respect to claims and losses arising from:

(i) fraud or willful misconduct of the Additional Bitcoin Custodian and (ii) the Anchorage Mutually Capped Liabilities (defined below), in no event will the Additional Bitcoin Custodian’s liability exceed the value of the cash or affected bitcoin giving rise to such liability.

With respect to Anchorage Mutually Capped Liabilities, other than with respect to claims and losses arising from fraud or willful misconduct of the Additional Bitcoin Custodian, in no event will the Additional Bitcoin Custodian’s liability exceed the greater of $5 million and the aggregate amount of fees paid by client to Anchorage in the 12-month period prior to the event giving rise to such liability.

Under the Anchorage Custodian Agreement, Anchorage Mutually Capped Liabilities means (i) claims and losses arising from a party’s breach of its confidentiality obligations under the Anchorage Custodian Agreement, (ii) a party’s indemnity obligations under the Anchorage Custodian Agreement (except with respect to the full amount of any bitcoin lost ), which shall not constitute an Anchorage Mutually Capped Liability), and (iii) claims and losses arising from the violation, misappropriation, or infringement by a party of any third-party intellectual and/or industrial property rights, including patent rights, copyrights, moral rights, trademarks, trade names, service marks, trade secrets, and rights in inventions (including applications for, and registrations, extensions, renewals, and re-issuances of the foregoing).

With respect to claims and losses related to a withdrawal or transfer of digital assets, the value of such digital assets would be determined by reference to the Benchmark Valuation (defined as the CME CF Bitcoin Reference Rate New York) on the date delivery of such digital assets in connection with such withdrawal or transfer is due in accordance with the terms of the Anchorage Custodian Agreement.

In respect of any incidental, indirect, special, punitive, consequential or similar losses, the Additional Bitcoin Custodian is not liable, even if the Additional Bitcoin Custodian has been advised of or knew or should have known of the possibility thereof.

The Additional Bitcoin Custodian is not liable for delays, suspension of operations, failure in performance, or interruption of service to the extent it is directly due to a cause or condition beyond the reasonable control of the Additional Bitcoin Custodian.

The Additional Bitcoin Custodian may elect not to renew the Anchorage Custodian Agreement by providing written notice of cancellation and non-renewal no less than one hundred eighty (180) days prior to the expiration of the term or may terminate the Anchorage Custodian Agreement immediately for Cause.

A “Termination for Cause” is defined in the Anchorage Custodian Agreement as:

(i) the Trust materially breaches any provision of the Anchorage Custodian Agreement and such breach remains uncured for a period of 30 calendar days after notice of such breach is provided by Anchorage to the Trust;

or (ii) the Trust becomes bankrupt or insolvent.

The Prime Execution Agent and The Trade Credit Lender

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However, bitcoin is only moved into the Trading Balance in connection with and to the extent of purchases and sales of bitcoin by the Trust and such bitcoin is swept from the Trust’s Trading Balance to the Trust’s Vault Balance each trading day pursuant to a regular end-of-day sweep process.

The Trust’s use of Trade Credits and early order cutoffs are also designed to limit the amount of time that any of the Trust’s bitcoin is held in the Trust’s Trading Balance.

The Trust’s use of Trade Credits and order cutoffs are also designed to limit the amount of time that any of the Trust’s bitcoin is held in the Trust’s Trading Balance.

The Prime Execution Agent holds the bitcoin associated with customer entitlements across a combination of omnibus cold wallets, omnibus “hot wallets” (meaning wallets whose private keys are generated and stored online, in Internet-connected computers or devices) or in omnibus accounts in the Prime Execution Agent’s name on a trading venue (including third-party venues and the Prime Execution Agent’s own execution venue) where the Prime Execution Agent executes orders to buy and sell bitcoin on behalf of its clients.

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The Sponsor has not independently verified the Prime Execution Agent’s representations.

To the extent the Trust sells bitcoin through the Prime Execution Agent, the Trust’s orders will be executed at a venue (including third-party venues and the Prime Execution Agent’s own execution venue) where the Prime Execution Agent executes orders to buy and sell bitcoin on behalf of the Trust (the “Connected Trading Venue”) that have been approved in accordance with the Prime Execution Agent’s due diligence and risk assessment process.

The Prime Execution Agent has represented that its due diligence on Connected Trading Venues include reviews conducted by the legal, compliance, security, privacy and finance and credit-risk teams, The Connected Trading Venues, which are subject to change from time to time, currently include Bitstamp, LMAX, Kraken, the platform operated by the Prime Execution Agent, as well as four additional non-bank market makers (“NBMMs”).

To the extent the Trust sells bitcoin through the Prime Execution Agent, the Trust’s orders will be executed at a venue (including third-party venues and the Prime Execution Agent’s own execution venue) where the Prime Execution Agent executes orders to buy and sell bitcoin on behalf of the Trust (each, a “Connected Trading Venue”) that has been approved in accordance with the Prime Execution Agent’s due diligence and risk assessment process.

The Prime Execution Agent has represented that its due diligence on Connected Trading Venues includes reviews conducted by its legal, compliance, security, privacy, finance and credit-risk teams, The Connected Trading Venues, which are subject to change from time to time, currently include Bitstamp, LMAX, Kraken, the platform operated by the Prime Execution Agent, as well as four additional non-bank market makers (“NBMMs”).

The Prime Execution Agent has represented to the Trust that it is unable to name the NBMMs due to confidentiality restrictions.

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Coinbase Global maintains a commercial crime insurance policy, which is intended to cover the loss of client assets held by Coinbase Global and all of its subsidiaries, including the Prime Execution Agent, including from employee collusion or fraud, physical loss including theft, damage of key material, security breach or hack, and fraudulent transfer.

The insurance maintained by the Coinbase Insureds is shared among all of Coinbase’s customers, is not specific to the Trust or to customers holding bitcoin with the Bitcoin Custodian or Prime Execution Agent and may not be available or sufficient to protect the Trust from all possible losses or sources of losses.

The insurance maintained by the Coinbase Insureds is shared among all of Coinbase’s customers, is not specific to the Trust or to customers holding bitcoin with the Bitcoin Custodian or the Prime Execution Agent and may not be available or sufficient to protect the Trust from all possible losses or sources of losses.

Once the Sponsor places an order to purchase or sell bitcoin on the Trading Platform, the associated bitcoin or cash used to fund or fill the order, if any, will be placed on hold and will generally not be eligible for other use or withdrawal from the Trust’s Trading Balance.

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Upon the occurrence of a Change in Law, the parties will negotiate to agree on modifications to the Prime Execution Agent Agreement or the Prime Execution Agent Services that would enable compliance with such Change in Law or, in the case of a material impediment, reduce the impact to the parties of such Change in Law and the “Coinbase Entities” (defined in the Prime Execution Agent Agreement as the Prime Execution Agent, Bitcoin Custodian, and Trade Credit Lender) shall continue to provide the Prime Execution Agent Services unless prohibited from doing so by the Change in Law.

If the parties cannot agree on modifications within thirty (30) days following notice from the Prime Execution Agent or if the Change in Law requires that Coinbase immediately ceases providing any Prime Execution Agent Services, the Prime Execution Agent may, upon written notice, suspend, restrict or terminate the Prime Execution Agent Services solely to the extent necessary to account for the Change in Law, provided that any such suspension, restriction, termination or modification is narrowly tailored and, to the extent not prohibited by the Change in Law, the Coinbase Entities will continue to provide, at a minimum, the Transition Services (as defined below) following any Change in Law.

If the parties cannot agree on modifications within 30 days following notice from the Prime Execution Agent or if the Change in Law requires that Coinbase immediately ceases providing any Prime Execution Agent Services, the Prime Execution Agent may, upon written notice, suspend, restrict or terminate the Prime Execution Agent Services solely to the extent necessary to account for the Change in Law, provided that any such suspension, restriction, termination or modification is narrowly tailored and, to the extent not prohibited by the Change in Law, the Coinbase Entities will continue to provide, at a minimum, the Transition Services (as defined below) following any Change in Law.

Upon the occurrence and continuation of a Cause (as defined below) event, and after giving effect to any notice requirement and cure period that may apply, the Prime Execution Agent may in its reasonable discretion, terminate the Prime Execution Agent Agreement and accelerate the Trust’s obligations, and/or take certain other actions.

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(iii) a Bankruptcy Event (as defined below);

and (iv) the failure by the Trust to repay Trade Credits by the applicable deadline specified in the Trade Financing Agreement which, in the event the failure results solely from an error or omission of an administrative or operational nature, remains uncured for a period of 1 business day.

Notwithstanding any termination of the Prime Execution Agent Agreement by the Prime Execution Agent for Cause, during any Transition Period (as defined below) the Coinbase Entities or their affiliates shall continue to provide the Transition Services (as defined below) and render such assistance as the Trust may reasonably request to enable the continuation and orderly assumption of the Transition Services to be effected by the Trust, its affiliate or any alternative service provider and shall continue to provide the Transition Services pursuant to the Prime Execution Agent Agreement, except to the extent any Transition Service is prohibited under applicable law (including but not limited to applicable sanctions programs) or by a facially valid subpoena, court order, or binding order of a government authority;

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The Prime Execution Agent Agreement defines a “Coinbase Termination Event” to mean the occurrence and continuance of (i) a Bankruptcy Event with respect to any Coinbase Entity, (ii) the failure of any Coinbase Entity to sell or withdraw or transfer the Trust’s bitcoin in accordance with the Trust’s instructions within the time periods set forth in the Prime Execution Agent Agreement and such failure is not cured within two business days following the Trust providing written notice to the relevant Coinbase Entity (“CB Return Cure”);

provided, however, that (A) if, prior to the expiration of the CB Return Cure, the Prime Execution Agent transfers cash to the Trust in an amount equal to the value of the bitcoin based on the Benchmark Valuation (defined as the CME CF Bitcoin Reference Rate New York) as of the time that the request to sell, transfer or withdraw was originally made by the Trust (the “BTC Cash Value”) or if the Prime Execution Agent delivers cash collateral to an account designated by the Trust and in which the Trust has a perfected, first priority security interest and in an amount equal to the BTC Cash Value until the relevant bitcoin is sold, withdrawn or transferred or the Trust elects to receive such amount in cash in lieu of the Prime Execution Agent’s obligation to sell, withdraw or transfer the relevant bitcoin, in each cash, such failure will be deemed cured;

provided, however, that (A) if, prior to the expiration of the CB Return Cure, the Prime Execution Agent transfers cash to the Trust in an amount equal to the value of the bitcoin based on the Benchmark Valuation as of the time that the request to sell, transfer or withdraw was originally made by the Trust (the “BTC Cash Value”) or if the Prime Execution Agent delivers cash collateral to an account designated by the Trust and in which the Trust has a perfected, first priority security interest and in an amount equal to the BTC Cash Value until the relevant bitcoin is sold, withdrawn or transferred or the Trust elects to receive such amount in cash in lieu of the Prime Execution Agent’s obligation to sell, withdraw or transfer the relevant bitcoin, in each cash, such failure will be deemed cured;

provided, further that, the Trust shall have the right to choose whether to receive the BTC Cash Value in lieu of the relevant bitcoin or receive the BTC Cash Value as cash collateral, or (B) if such failure is due to a technology or security issue where, in the commercially reasonable opinion of the Prime Execution Agent, returning the relevant bitcoin would result in material risk to the Trust or the Prime Execution Agent or may result in the relevant bitcoin being lost or otherwise not successfully returned and the Prime Execution Agent promptly notifies the Trust promptly upon Client’s notice of such failure, (1) the Trust may request that the Prime Execution Agent still sell, withdraw or transfer the bitcoin, but the Prime Execution Agent will have no liability with respect to any such sell, withdrawal or transfer (unless the Prime Execution Agent or any of the Coinbase Entities act with negligence unrelated to such technology or security issue) and any failure to withdraw or transfer shall not result in a Coinbase Termination Event if the Trust does not receive the withdrawn or transferred bitcoin or the proceeds of any such sale due to such technology or security issue, or (2) if the Trust does not elect to have the Prime Execution Agent still make the sale, withdrawal or transfer, a Coinbase Termination Event shall not occur while the relevant security or technology event is occurring and continuing, (iii) the failure of any Coinbase Entity to withdraw or transfer cash to the Trust in accordance with the Trust’s instructions within the time periods set forth in the Prime Execution Agent Agreement and such failure is not cured within one business day following the Trust providing written notice to the relevant Coinbase Entity, (iv) a Coinbase Entity intentionally or willfully, materially breaches any provision of the Prime Execution Agent Agreement (other than the provisions of the Custodian Agreement) and such breach remains uncured for a period of 10 calendar days after notice of such breach is provided by the Trust to the Prime Execution Agent;

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Neither the Prime Execution Agent nor any other Coinbase entity is permitted to withdraw the Trust’s bitcoin from the Trust’s Vault Balance, or loan, hypothecate, pledge or otherwise encumber the Trust’s bitcoin, without the consent of the Trust.

The Trading Balance is subject to the lien to secure outstanding Trade Credits in favor of the Trade Credit Lender discussed below.

The Trading Balance is subject to a lien to secure outstanding Trade Credits in favor of the Trade Credit Lender discussed below.

Under the Prime Execution Agent Agreement, the Prime Execution Agent’s liability is limited as follows, among others:

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In connection with a purchase order, the Trust will first borrow cash from the Trade Credit Lender using the Trade Financing Agreement, and then purchase bitcoin.

The purpose of borrowing the bitcoin or cash used in connection with cash creation and redemption or to pay these fees and expenses from the Trade Credit Lender is to lock in the bitcoin price on the trade date or the payment date, as applicable, rather than waiting for the funds associated with the creation to be transferred by the Cash Custodian to the Prime Execution Agent prior to purchasing the bitcoin or for the bitcoin held in the Vault Balance to be transferred to a Trading Balance prior to selling the bitcoin (a process which may take up to twenty four hours, or longer if the Bitcoin blockchain is experiencing delays in transaction confirmation, or if there are other delays).

The purpose of borrowing the bitcoin or cash used in connection with cash creation and redemption or to pay these fees and expenses from the Trade Credit Lender is to lock in the bitcoin price on the trade date or the payment date, as applicable, rather than waiting for the funds associated with the creation to be transferred by the Cash Custodian to the Prime Execution Agent prior to purchasing the bitcoin or for the bitcoin held in the Vault Balance to be transferred to a Trading Balance prior to selling the bitcoin (a process which may take up to 24 hours, or longer if the Bitcoin blockchain is experiencing delays in transaction confirmation, or if there are other delays).

In the event Trade Credits are unavailable from the Trade Credit Lender or become exhausted, the Sponsor would require the Authorized Participant to deliver cash on the trade date so that a purchase order can be settled in a timely manner.

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This could cause the execution price associated with such trades, following the completion of the transfer, to materially deviate from the execution price that would have existed on the original trade or payment date, which could negatively impact Shareholders.

In addition, to the extent that the execution price for purchases and sales of bitcoin related to creations and redemptions and sales of bitcoin in connection with paying the Sponsor’s Fee and any other Trust expenses, to the extent applicable, deviate significantly from the Index price used to determine the NAV of the Trust, the Shareholders may be negatively impacted.

In addition, to the extent that the execution price for purchases and sales of bitcoin related to creations and redemptions and sales of bitcoin in connection with paying the Sponsor’s Fee and any other Trust expenses, to the extent applicable, deviate significantly from the Index (defined below) price used to determine the NAV of the Trust, the Shareholders may be negatively impacted.

Valuation of Bitcoin ; The CF Benchmarks Index

In determining the net asset value of the Trust, the Trust Administrator values the bitcoin held by the Trust based on an index (the “Index”), unless the Sponsor in its sole discretion determines that the Index is unreliable.

The methodology used to calculate the Index price to value bitcoin in determining the net asset value of the Trust may not be deemed consistent with U.S.

On each day other than a Saturday or a Sunday or a day on which NASDAQ is closed for regular trading (a “Business Day”), as soon as practicable after 4:00 p.m.

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For purposes of making these calculations, a Business Day means any day other than a day when NASDAQ is closed for regular trading.

The CF Benchmarks Index constitutes the Index, unless the CF Benchmarks Index is not available or the Sponsor in its sole discretion determines the CF Benchmarks Index is unreliable as the Index and therefore determines not to use the CF Benchmarks Index as the Index.

CF Benchmarks Index is calculated as of 4:00 p.m.

The CF Benchmarks Index is designed based on the IOSCO Principles for Financial Benchmarks and is a Registered Benchmark under UK Benchmark Regulations (“BMR”).

The CF Benchmarks Index is designed based on the IOSCO Principles for Financial Benchmarks and is a Registered Benchmark under the UK Benchmark Regulations (“BMR”).

The administrator of the CF Benchmarks Index is CF Benchmarks Ltd.

(the “Index Administrator”) a UK incorporated company, authorized and regulated by the Financial Conduct Authority (“FCA”) of the UK as a Benchmark Administrator, under UK BMR.

(the “Index Administrator”) a UK incorporated company, authorized and regulated by the Financial Conduct Authority (“FCA”) of the UK as a Benchmark Administrator, under the UK BMR.

The CF Benchmarks Index was created to facilitate financial products based on bitcoin.

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dollar price of one bitcoin at 4:00 p.m.

Specifically, the CF Benchmarks Index is calculated based on the “Relevant Transactions” (as defined below) of all of its constituent bitcoin platforms, which are currently Bitstamp, Coinbase, itBit, Kraken, Gemini, LMAX Digital, and Bullish (the “Constituent Platforms”), as follows:

Specifically, the CF Benchmarks Index is calculated based on the “Relevant Transactions” (as defined below) of all of its constituent bitcoin platforms, which are currently Bitstamp, Coinbase, itBit, Kraken, Gemini, LMAX Digital, Crypto.com, and Bullish (the “Constituent Platforms”), as follows:

All Relevant Transactions are added to a joint list, recording the time of execution, and trade price for each transaction.

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In the future, if the Sponsor decides to waive all or a portion of the Sponsor’s Fee, Shareholders will be notified in a prospectus supplement, in its periodic Exchange Act reports and/or on the Trust’s website.

The Trust may incur certain extraordinary, non-recurring expenses that are not assumed by the Sponsor, including but not limited to, taxes and governmental charges, any applicable brokerage commissions, financing fees, Bitcoin network fees and similar transaction fees, 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 Cash Custodian, Bitcoin Custodian, Prime Execution Agent, Trust Administrator, or other agents, service providers or counterparties of the Trust, and extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters.

The Trust may incur certain extraordinary, non-recurring expenses that are not assumed by the Sponsor, including but not limited to, taxes and governmental charges, any applicable brokerage commissions, financing fees, Bitcoin network fees and similar transaction fees, 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 Cash Custodian, the Bitcoin Custodian, the Additional Bitcoin Custodian, the Prime Execution Agent, the Trust Administrator, or other agents, service providers or counterparties of the Trust, and extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters.

Because the Trust does not have any income, it will need to sell bitcoin to cover the Sponsor’s Fee and expenses not assumed by the Sponsor, if any.

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dollars at the price available through the Prime Execution Agent’s Coinbase Prime service (less applicable trading fees) through the Trading Platform which the Sponsor is able to obtain using commercially reasonable efforts.

The number of bitcoins represented by a Share will decline each time the Trust pays the Sponsor’s Fee or any Trust expenses not assumed by the Sponsor by transferring or selling bitcoins.

The number of bitcoin represented by a Share will decline each time the Trust pays the Sponsor’s Fee or any Trust expenses not assumed by the Sponsor by transferring or selling bitcoin.

The Trust cannot reinvest any cash received from such sales into bitcoin, and must use that cash to pay the Sponsor’s Fee and/or other Trust expenses not assumed by the Sponsor, and/or distribute any excess cash to investors.

The quantity of bitcoins to be sold to permit payment of the Sponsor’s Fee or Trust expenses not assumed by the Sponsor, will vary from time to time depending on the level of the Trust’s expenses and the value of bitcoins held by the Trust.

The quantity of bitcoin to be sold to permit payment of the Sponsor’s Fee or Trust expenses not assumed by the Sponsor, will vary from time to time depending on the level of the Trust’s expenses and the value of bitcoin held by the Trust.

Assuming that the Trust is a grantor trust for U.S.

federal income tax purposes, each delivery or sale of bitcoins by the Trust for the payment of expenses generally will be a taxable event to Shareholders.

federal income tax purposes, each delivery or sale of bitcoin by the Trust for the payment of expenses generally will be a taxable event to Shareholders.

Federal Income Tax Consequences.”

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The Trust will conduct its bitcoin purchase and sale transactions by, in its sole discretion, choosing to trade directly with Bitcoin Trading Counterparties or choosing to trade through the Prime Execution Agent through its Coinbase Prime service pursuant to the Prime Execution Agent Agreement.

As of the date of this report, the Bitcoin Trading Counterparties are Cumberland DRW LLC, Flow Traders B.V., JSCT, LLC and Virtu Financial Singapore Pte.

As of the date of this report, the Bitcoin Trading Counterparties are Cumberland DRW LLC, Flow Traders B.V., JSCT, LLC, Virtu Financial Singapore Pte.

and Galaxy Digital Trading Cayman, LLC.

JSCT, LLC is an affiliate of Jane Street Capital LLC and Virtu Financial Singapore Pte.

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jurisdictions.

The Authorized Participants will deliver only cash to create Shares and will receive only cash when redeeming Shares.

The Authorized Participants will deliver bitcoin or cash to create Shares and will receive either bitcoin or cash when redeeming Shares.

Further, Authorized Participants will not directly or indirectly purchase, hold, deliver, or receive bitcoin as part of the creation or redemption process or otherwise direct the Trust or a third party with respect to purchasing, holding, delivering, or receiving bitcoin as part of the creation or redemption process.

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However, orders received by BRIL after the Creation Early Order Cutoff Time on a Business Day will not be accepted and should be resubmitted on the following Business Day.

Fractions of a bitcoin smaller than .00000001 (known as a “satoshi”) are disregarded for purposes of the computation of the Basket Bitcoin Amount.

Fractions of bitcoin smaller than .00000001 (known as a “satoshi”) are disregarded for purposes of the computation of the Basket Bitcoin Amount.

If the Trustee accepts the purchase order, BRIL will transmit to the Authorized Participant, via electronic mail message or other electronic communication, no later than 8:00 p.m.

ET on the date such purchase order is received, or deemed received, a copy of the purchase order endorsed “Accepted” by the Trustee and indicating the Basket Amount that the Authorized Participant must deliver to the Cash Custodian or Prime Execution Agent in exchange for each Basket.

In the case of purchase orders submitted via BRIL’s electronic order entry system, the Authorized Participant will receive an automated email indicating the acceptance of the purchase order and the purchase order will be marked “Accepted” in BRIL’s electronic order entry system.

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For settlement of a creation, the Trust delivers Shares to the Authorized Participant in exchange for cash received from the Authorized Participant.

Meanwhile, the Bitcoin Trading Counterparty or Prime Execution Agent, as applicable, delivers the required bitcoin pursuant to its trade with the Trust into the Trust’s Trading Balance with the Prime Execution Agent in exchange for cash.

Meanwhile, the Bitcoin Trading Counterparty or the Prime Execution Agent, as applicable, delivers the required bitcoin pursuant to its trade with the Trust into the Trust’s Trading Balance with the Prime Execution Agent in exchange for cash.

In the event the Trust has not been able to successfully execute and complete settlement of a bitcoin transaction by the settlement date of the purchase order, the Authorized Participant will be given the option to (1) cancel the purchase order, or (2) accept that the Trust will continue to attempt to complete the execution, which will delay the settlement date of the purchase order.

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As of the date of this report, the Authorized Participants are ABN AMRO Clearing USA LLC, BMO Capital Markets Corp., BofA Securities, Inc., Citadel Securities LLC, Citigroup Global Markets, Inc., Goldman Sachs & Co.

LLC, Jane Street Capital, LLC, Jefferies LLC, JP Morgan Securities LLC, Macquarie Capital (USA) Inc., UBS Securities LLC and Virtu Americas LLC.

LLC, Jane Street Capital, LLC, Jefferies LLC, JP Morgan Securities LLC, Macquarie Capital (USA) Inc., UBS Securities LLC Marex Capital Markets Inc.

and Virtu Americas LLC.

Additional Authorized Participants may be added at any time, subject to the discretion of the Sponsor.

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To the extent the price realized is selling the bitcoin is higher than the price utilized in the NAV, the Authorized Participant shall get to keep the dollar impact of any such difference.

The transfers of bitcoin from the Trust’s Trading Balance to the Bitcoin Trading Counterparty’s account at the Prime Execution Agent or to the Prime Execution Agent is an “off-chain” transaction that is recorded in the books and records of the Prime Execution Agent.

The transfers of bitcoin from the Trust’s Trading Balance to the Bitcoin Trading Counterparty’s account at the Prime Execution Agent or to the Prime Execution Agent are “off-chain” transactions that are recorded in the books and records of the Prime Execution Agent.

The Trust’s Trading Balance with the Prime Execution Agent may not be funded with bitcoin on the trade date for the sale of bitcoin in connection with the redemption order, when bitcoin remains in the Trust’s Vault Balance with the Bitcoin Custodian at the point of intended execution of a sale of bitcoin.

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any expenses of any extraordinary services performed by the Trustee or the Sponsor on behalf of the Trust or expenses of any action taken by the Trustee or the Sponsor to protect the Trust or the rights and interests of holders of Shares;

any indemnification of the Sponsor and its shareholders, directors, officers, employees, affiliates (as such term is defined under the Securities Act of 1933, as amended) and subsidiaries and agents, Cash Custodian, Bitcoin Custodian, Prime Execution Agent, Trust Administrator, or other agents, service providers or counterparties of the Trust as described below;

any indemnification of the Sponsor and its shareholders, directors, officers, employees, affiliates (as such term is defined under the Securities Act of 1933, as amended) and subsidiaries and agents, the Cash Custodian, the Bitcoin Custodian, the Prime Execution Agent, the Trust Administrator, or other agents, service providers or counterparties of the Trust as described below;

extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters.

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The following is a discussion of the material U.S.

federal income tax consequences that generally will apply to the purchase, ownership and disposition of Shares for Shareholders who acquire their Shares solely for cash.

federal income tax consequences that generally will apply to the purchase, ownership and disposition of Shares.

The discussion below is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations promulgated thereunder and judicial and administrative interpretations of the Code, all as in effect on the date of this report and all of which are subject to change either prospectively or retroactively.

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an estate, the income of which is includible in gross income for U.S.

federal income tax purposes regardless of its source;

federal income tax purposes regardless of its source; or

a trust, if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S.

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a nonresident alien individual;

a foreign corporation;

a foreign corporation; or

an estate or trust whose income is not subject to U.S.

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federal income tax purposes or with respect to any other matter.

If the IRS were to assert successfully that the Trust is not classified as a “grantor trust,” the Trust would likely be classified as either a partnership for U.S.

federal income tax purposes, in which case there might be different timing or other tax consequences to the Shareholders, or as a publicly traded partnership that would be taxable as a corporation for U.S.

federal income tax purposes, in which case the Trust would be taxed in the same manner as a regular corporation on its taxable income and distributions to Shareholders out of the earnings and profits of the Trust generally would be taxed to Shareholders as ordinary dividend income (which may be eligible for preferential rates, in the case of non-corporate taxpayers, or a dividends received deduction, in the case of corporate taxpayers).

However, due to the uncertain treatment of digital assets for U.S.

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

If the IRS were to assert successfully that the Trust is not classified as a “grantor trust,” the Trust might be classified as a partnership for U.S.

federal income tax purposes.

If the Trust were classified as a partnership for U.S.

federal income tax purposes, the tax consequences of owning Shares generally would not be materially different from the tax consequences described herein, although there might be certain differences, including with respect to timing of the recognition of taxable income or loss and (in certain circumstances) withholding taxes.

In addition, tax information reports provided to beneficial owners of Shares would be made in a different form.

If the Trust were not classified as either a grantor trust or a partnership for U.S.

federal income tax purposes, it generally would be classified as a corporation for such purposes.

If it were treated as a corporation, the Trust would be subject to entity-level U.S.

federal income tax (currently at the rate of 21%), plus possible state and/or local taxes 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.

Any such dividend distributed to a beneficial owner of Shares that is a non-U.S.

person for U.S.

federal income tax purposes generally would be subject to U.S.

federal withholding tax at a rate of 30% (or such lower rate as provided in an applicable tax treaty).

Except as otherwise indicated, the remainder of this discussion assumes that the Trust is classified as a grantor trust for U.S.

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Shareholders also will be treated as if they directly received their respective pro rata shares of the Trust’s income, if any, and as if they directly incurred their respective pro rata shares of the Trust’s expenses.

In the case of a Shareholder that purchases Shares for cash, its initial tax basis in its pro rata share of the assets held in the Trust at the time it acquires its Shares will be equal to its cost of acquiring the Shares.

In the case of a Shareholder that acquires its Shares as part of the creation of a Basket, the delivery of bitcoin to the Trust in exchange for the underlying bitcoin represented by the Shares will not be a taxable event to the Shareholder, and the Shareholder’s tax basis and holding period for the Shareholder’s pro rata share of the bitcoin held in the Trust will be the same as its tax basis and holding period for the bitcoin delivered in exchange therefor.

For purposes of this discussion, and unless stated otherwise, it is assumed that all of a Shareholder’s Shares are acquired on the same date and at the same price per Share.

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While the IRS has not addressed all situations in which airdrops occur, it is clear from the reasoning of the IRS’s current guidance that it generally would treat an airdrop as a taxable event giving rise to ordinary income, and it is anticipated that any gain or loss from disposition of any assets received in the airdrop would generally be treated as giving rise to capital gain or loss that generally would be short-term capital gain or loss, unless the holding period of those assets were treated as being greater than one year as of the time they are sold.

The Sponsor has committed to cause the Trust to permanently and irrevocably abandon any Incidental Rights and IR Digital Asset to which the Trust may become entitled in the future.

The Sponsor has committed to cause the Trust to permanently and irrevocably abandon any Incidental Rights and IR Digital Assets to which the Trust may become entitled in the future.

However, there can be no assurance that these abandonments would be treated as effective for U.S.

federal income tax purposes, or that the Sponsor will continue to cause the Trust to permanently and irrevocably abandon any Incidental Rights and IR Digital Asset if there are future regulatory developments that would make it feasible for the Trust to retain those assets.

federal income tax purposes, or that the Sponsor will continue to cause the Trust to permanently and irrevocably abandon any Incidental Rights and IR Digital Assets if there are future regulatory developments that would make it feasible for the Trust to retain those assets.

Brokerage Fees and Trust Expenses

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Similarly, any brokerage fee incurred by a Shareholder in selling Shares will reduce the amount realized by the Shareholder with respect to the sale.

It is also possible that, based on the mechanics associated with redemptions, a Shareholder may recognize some amount of income, expense, gain or loss in connection with redemptions of other Shareholders, based on differences between the prices at which Shareholders generally will be redeemed and the actual prices at which the Trust sells bitcoin.

Shareholders will be required to recognize the full amount of gain or loss upon a sale or deemed sale of bitcoin by the Trust (as discussed above), even though some or all of the proceeds of such sale are used by the Sponsor to pay Trust expenses.

Shareholders may deduct their respective pro rata shares of each expense incurred by the Trust to the same extent as if they directly incurred the expense.

Shareholders who are individuals, estates or trusts, however, may be required to treat some or all of the expenses of the Trust as miscellaneous itemized deductions.

An individual may not deduct miscellaneous itemized deductions for tax years beginning after December 31, 2017 and before January 1, 2026.

For tax years beginning after December 31, 2025, individuals may deduct certain miscellaneous itemized deductions only to the extent they exceed in the aggregate 2% of the individual’s adjusted gross income.

Similar rules apply to certain miscellaneous itemized deductions of estates and trusts.

In addition, such deductions may be subject to phase outs and other limitations under applicable provisions of the Code.

However, most expenses incurred by the Trust are expected to be treated as “miscellaneous itemized deductions.” As a result, Shareholders who are individuals, estates or trusts generally will not be able to deduct such expenses for U.S.

federal income tax purposes.

Investment by U.S.

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Tax-Exempt Shareholder owns an interest in a grantor trust, such as the Trust, the activities of the Trust (and any pass-through entities or disregarded entities in which the Trust owns an interest) are attributed to the U.S.

Tax-Exempt Shareholder for purposes of determining whether such Shareholder’s share of income is of the grantor trust UBTI.

Tax-Exempt Shareholder for purposes of determining whether such Shareholder’s share of income of the grantor trust is UBTI.

The Trust’s investments and activities relating thereto may cause a U.S.

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federal income tax consequences of an investment in Shares.

Income Taxation of Non-U.S.

Shareholder that (1) in the case of an individual is not present in the United States for 183 days or more during the taxable year of the sale or other disposition of Shares, or upon the sale of bitcoin by the Trust, and (2) is not engaged in the conduct of a trade or business in the United States, generally will not be subject to U.S.

federal income tax with respect to gain recognized upon the sale or other disposition of Shares, or upon the sale of bitcoin by the Trust.

The Trust does not expect (though no assurance can be given) that it will be treated as engaged in a trade or business within the United States or recognize income that is treated as “effectively connected” with the conduct of a trade or business in the United States (“ECI”).

However, while it is unlikely that any income that the Trust might recognize as a result of a fork, airdrop or similar event would give rise to effectively connected income, there has been no guidance as to how such events may be treated.

Taxation of Non-U.S.

The Trust expects (though no assurance can be given) that it should not be treated as engaged in a trade or business within the United States or recognize income that is treated as “effectively connected” with the conduct of a trade or business in the United States (“ECI”).

However, while it is unlikely that any income that the Trust might recognize as a result of a fork, airdrop or similar event would give rise to ECI, there has been no guidance as to how such events may be treated.

Therefore, there can be no assurance that the Trust will not be treated as engaged in a U.S.

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has an income tax treaty may be entitled to the benefits of that treaty in order to reduce or eliminate the 30% U.S.

withholding tax with respect to that Shareholder’s distributive share of income that the Trust treats as U.S.-source FDAP if under the laws of that non-U.S.

withholding tax with respect to that Shareholder’s distributive share of income that is treated as U.S.-source FDAP if under the laws of that non-U.S.

jurisdiction, the Trust is treated as tax-transparent and certain other conditions are met.

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Shareholders will generally be required to certify their non-U.S.

status by providing the Trust with an executed IRS Form W-8BEN or W-8BEN-E.

However, if a Non-U.S.

Shareholder fails to provide such IRS Forms, the Trust intends to withhold at a full 30% rate on any Non-U.S.

status by providing an executed IRS Form W-8BEN or W-8BEN-E.

If a Non-U.S.

Shareholder fails to provide such IRS Forms, U.S.

federal tax at a full 30% rate may be withheld from the Non-U.S.

Shareholder’s share of U.S.-source FDAP, in which case the Non-U.S.

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Information Reporting and Backup Withholding

The Trustee will file certain information returns with the IRS, and provide certain tax-related information to Shareholders, in connection with the Trust.

To the extent required by applicable regulations, each Shareholder will be provided with information regarding its allocable portion of the Trust’s annual income, expenses, gains and losses (if any).

Shareholders generally may comply with these identification procedures by providing the Trust with a duly completed and executed IRS Form W-9 (Request for Taxpayer Identification Number and Certification).

Shareholders generally may comply with these identification procedures by providing the Fund with the relevant IRS Form W-8, duly completed and executed.

Shareholders may be required to satisfy certain information reporting or certification requirements, e.g., those imposed by FATCA, in order to avoid certain information reporting and withholding tax requirements.

The Trust or the appropriate broker will file certain information returns with the IRS, and provide certain tax-related information to Shareholders, in connection with the Trust.

Shareholders may be required to provide certain information or make certain certifications in order to avoid certain information reporting and backup withholding requirements.

Shareholders generally may comply with these requirements by providing a duly completed and executed IRS Form W-9 (Request for Taxpayer Identification Number and Certification).

Shareholders generally may comply with these requirements by providing the relevant IRS Form W-8, duly completed and executed.

The amount of any backup withholding will be allowed as a credit against a Shareholder’s U.S.

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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-K

Item 1. Business