What changed in this filing

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Item 9A. Controls and Procedures

2023-03-21 compared with 2022-03-30 · 535 added, 505 removed, 295 unchanged (78% of the section changed)

Controls and Procedures

Evaluation of Disclosure

Controls and Procedures

controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed

in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded,

processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and

procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in

company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive

Officer (who serves as our principal executive officer) and Chief Financial Officer (who serves as our principal financial and

accounting officer), to allow timely decisions regarding required disclosure.

by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation

of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2021.

their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures

(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective due to ineffective oversight of the Trust’s

financial reporting by management, which resulted in a revision of our December 31, 2020 financial statements and our March 31,

2021 financial statements.

report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation

report of the company’s registered public accounting firm due to a transition period established by rules of the Securities

Exchange Commission for newly public companies.

Management determined that the circumstances that led to the revision of our financial statements for the year ended December 31, 2020

and the interim period ended March 31, 2021 was a material weakness in internal controls related to net assets presentation in the statement of assets and liabilities, which were due solely to human error, and were addressed by the

following personnel and policy changes.

The enhancements included hiring additional qualified accounting and financial reporting personnel,

providing greater access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding financial statements presentation.

Changes in Internal Control

over Financial Reporting

There was no change in our

internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Evaluation of Disclosure Controls and

The Trust maintains disclosure

controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted

under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information

required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management,

including our Chief Executive Officer (who serves as our principal executive officer) and Chief Financial Officer (who serves as

our principal financial and accounting officer), to allow timely decisions regarding required disclosure.

As previously described

in Part I, Item 4 of our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2021, Part II, Item 9A of our

Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and Part I, Item 4 of our Quarterly Reports on Form 10-Q

for the fiscal quarters ended March 31, 2022, June 30, 2022, and September 30, 2022, management made enhancements to remediate

the previously reported material weakness in our internal controls and procedures.

The remediation efforts included hiring additional

qualified accounting and financial reporting personnel, providing greater access to accounting literature, research materials and

documents and increased communication among our personnel and third-party professionals with whom we consult regarding financial

statements presentation.

As required by Rules 13a-15

and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness

of the design and operation of our disclosure controls and procedures as of December 31, 2022.

Based upon their evaluation, our

Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules

13a-15(e)and 15d-15(e) under the Exchange Act) were effective.

Management’s Report on Internal

Control over Financial Reporting

Sponsor’s management is responsible for establishing and maintaining adequate internal control over financial reporting,

as defined under Exchange Act Rules 13a-15(f) and 15d-15(f).

The Trust’s internal control over financial reporting is a process

designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements

for external purposes in accordance with accounting principles generally accepted in the United States.

Internal control over financial

reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately

and fairly reflect the transactions and dispositions of the Trust’s assets, (2) provide reasonable assurance that transactions

are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,

and that the Trust’s receipts and expenditures are being made only in accordance with appropriate authorizations;

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Trust’s

assets that could have a material effect on the financial statements.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections

of any evaluation of effectiveness to future periods are subject to the risk that controls may become ineffective because of changes

in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Principal Executive Officer and Principal Financial and Accounting Officer of the Sponsor assessed the effectiveness of the Trust’s

internal control over financial reporting as of December 31, 2022.

In making this assessment, they used the criteria set forth

by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated

Framework (2013).

Their assessment included an evaluation of the design of the Trust’s internal control over financial reporting

and testing of the operational effectiveness of its internal control over financial reporting.

Based on their assessment and those

criteria, the Principal Executive Officer and Principal Financial and Accounting Officer of the Sponsor concluded that the Trust

maintained effective internal control over financial reporting as of December 31, 2022.

are an “emerging growth company” under the JOBS Act, as such our independent registered public accounting firm will

not be required to attest to the effectiveness of our internal control over financial reporting for so long as we are an emerging

growth company.

Changes in Internal Control over Financial

Other than the successful

implementation and the completion of testing of the remediation efforts discussed above, there was no change in our internal control

over financial reporting that occurred during the fiscal quarter ended December 31, 2022, that has materially affected, or is reasonably

likely to materially affect, our internal control over financial reporting.

Other Information

Not applicable.

Disclosure Regarding Foreign Jurisdictions

that Prevent Inspections

Disclosure Regarding Foreign Jurisdictions that

Prevent Inspections

Not applicable.

Directors, Executive Officers and Corporate Governance

does not have any directors, officers or employees.

Under the Trust Agreement, all management functions of the Trust have been

delegated to and are conducted by the Sponsor, its agents and its affiliates, including without limitation, the Custodian and its

As officers of the Sponsor, Gregory D.

King, the Chief Executive Officer of the Sponsor, Robert Rokose, the Chief Financial

Officer of the Sponsor and Matthew Mascera, as Director of Operations of the Sponsor, may take certain actions and execute certain

agreements and certifications for the Trust, in their capacity as the principal officers of the Sponsor.

The following

individuals are the officers of the Sponsor responsible for overseeing the business and operations of the Trust:

King, 47, Chief

Executive Officer

King is Founder and CEO of Osprey Funds, LLC and has served as CEO of the Sponsor since its inception in October 2018.

is the primary author of several financial industry innovations including creating the first ever exchange-traded note (“ETN”)

for Barclays in 2006.

In 2009, Greg cofounded VelocityShares, LLC, a provider of alternative ETPs, partnering with Credit Suisse

as product issuer.

Directors, Executive Officers

and Corporate Governance

The Trust does not have

any directors, officers or employees.

Under the Trust Agreement, all management functions of the Trust have been delegated to and

are conducted by the Sponsor, its agents and its affiliates, including without limitation, the Custodian and its agents.

of the Sponsor, Gregory D.

King, the Chief Executive Officer of the Sponsor, Robert Rokose, the Chief Financial Officer of the

Sponsor and Matthew Mascera, as Director of Operations of the Sponsor, may take certain actions and execute certain agreements

and certifications for the Trust, in their capacity as the principal officers of the Sponsor.

The following individuals

are the officers of the Sponsor responsible for overseeing the business and operations of the Trust:

King, 48, Chief Executive Officer

King is Founder

and CEO of Osprey Funds, LLC and has served as CEO of the Sponsor since its inception in October 2018.

Greg is the primary author

of several financial industry innovations including creating the first ever exchange-traded note (“ETN”) for Barclays

In 2009, Greg co-founded VelocityShares, LLC, a provider of alternative ETPs, partnering with Credit Suisse as product

VelocityShares was acquired by Janus Capital in 2014.

During his career, Greg has created and launched over

100 exchange traded funds and notes for Barclays, Credit Suisse, Global X Funds, VelocityShares, Rex Shares, LLC and Osprey Funds.

Greg received a Master’s in Business Administration from the University of California, Davis, and is a CFA Charter holder.

He has been an investor in Bitcoin since 2013.

Robert Rokose, 51, Chief

Financial Officer and Treasurer

Rokose became Treasurer and CFO of the Sponsor in March 2020.

He is also CFO of REX Shares, LLC, originally the parent company

to the Sponsor.

Bob has 28 years of accounting and financial services experience.

During his career, Greg has created and launched over 100 exchange-traded

funds and notes for Barclays, Credit Suisse, Global X Funds, VelocityShares, REX Shares, LLC, and Osprey Funds.

Greg received a

Master’s in Business Administration from the University of California, Davis, and is a CFA Charter holder.

He has been an

investor in Bitcoin since 2013.

Robert Rokose, 52, Chief Financial Officer

and Treasurer

Robert Rokose became Treasurer and CFO of the

Sponsor in March 2020.

He is also CFO of REX Shares, LLC, originally the parent company to the Sponsor.

Bob has 28 years of accounting

and financial services experience.

His previous roles include CFO of U.S.

at JP Morgan Asset Management, Managing Director & CFO for PIMCO/Allianz Funds and Assistant Vice President & Assistant

Controller of publicly held Lexington Global Asset Managers.

Rokose has served as a Financial Services Consultant and has acted

in that role since November 2016.

From May 2014 to October 2016, Mr.

Rokose was Chief Financial Officer and Treasurer of AccuShares

Investment Management where he led all financial accounting and reporting for the organization.

Bob is a Certified Public Accountant,

licensed in the state of New York.

He has an undergraduate degree from Pace University and a Master of Business Administration

from the University of Connecticut.

Jack Drogin, 59, General

became General Counsel and Chief Compliance Officer of the Sponsor in May 2021.

He has over thirty years’ experience as an

attorney, including ten on the Staff of the U.S.

Funds at JP Morgan Asset Management, Managing Director &

CFO for PIMCO/Allianz Funds and Assistant Vice President & Assistant Controller of publicly held Lexington Global Asset

Rokose has served as a Financial Services Consultant and has acted in that role since November 2016.

From May 2014

to October 2016, Mr.

Rokose was Chief Financial Officer and Treasurer of AccuShares Investment Management where he led all financial

accounting and reporting for the organization.

Bob is a Certified Public Accountant, licensed in the state of New York.

an undergraduate degree from Pace University and a Master of Business Administration from the University of Connecticut.

Jack Drogin, 60, General Counsel

Jack Drogin became General Counsel and Chief

Compliance Officer of the Sponsor in May 2021.

He has over thirty years’ experience as an attorney, including ten on the

Staff of the U.S.

Securities and Exchange Commission, Division of Trading and Markets.

1991 toJune 2001.

From October 2019 to May 2021, Jack was a shareholder in the Washington, D.C.

office of Murphy & McGonigle,

, a firm focused on financial services law and regulation.

He holds an undergraduate degree from the University of Pennsylvania

and a law degree from Harvard Law School.

from January 1991 to June 2001.

joining Osprey Funds, LLC, Jack was a shareholder in the Washington, D.C.

office of Murphy & McGonigle, P.C., a firm focusing

on financial services law and regulation.

He holds an undergraduate degree from the University of Pennsylvania and a law degree

from Harvard Law School.

Jack is a member of the New York and District of Columbia bars.

Matthew Mascera, 46, Director

of Operations

Mascera became Director of Operations of the Sponsor in March 2020.

Matthew Mascera, 47, Director of Operations

Matthew Mascera became

Director of Operations of the Sponsor in March 2020.

Matt has 23 years of experience in the financial services industry.

From February 2016 to June 2019, Matt was Director of Operations and Trading at Seacliff Capital, a long/short equity hedge fund.

From 2012 to 2015, Matt was a Senior Vice President in equities at FBR & Co.

Previous to that, Matt was an Executive Director

at UBS Securities where he had been since 2005.

From February

2016 to June 2019, Matt was Director of Operations and Trading at Seacliff Capital, a long/short equity hedge fund.

2015, Matt was a Senior Vice President in equities at FBR & Co.

Previous to that, Matt was an Executive Director at UBS

Securities where he had been since 2005.

Matt holds a bachelor’s degree in Finance from Tulane University.

Advisory Board

The Sponsor has

an advisory board, which serves in an informal, advisory capacity.

The members listed below have no formal duties in connection

with their service, but have agreed to make themselves available, upon the Sponsor’s request to advise on Sponsor matters,

including without limitation those relating to the Trust.

Each member of the advisory board, listed below, receives equity in the

Sponsor in return for their services.

Brian is the Managing

Partner & Chief Investment Officer at Off the Chain Capital, a firm focused on Graham/Dodd value investing in blockchain digital

Josh is the CEO

of Ritholtz Wealth management, a New York City-based investment advisory firm.

The Sponsor has an advisory

board, which serves in an informal, advisory capacity.

The members listed below have no formal duties in connection with their

service, but have agreed to make themselves available, upon the Sponsor’s request to advise on Sponsor matters, including

without limitation those relating to the Trust.

Each member of the advisory board, listed below, receives equity in the Sponsor

in return for their services.

Brian is the Managing Partner &

Chief Investment Officer at Off the Chain Capital, a firm focused on Graham/Dodd value investing in blockchain digital assets.

Josh is the CEO of Ritholtz

Wealth management, a New York City-based investment advisory firm.

Michael Komaransky

Michael is the founder

of Grapefruit Trading, a crypto market maker firm.

Michael is the founder of

Grapefruit Trading, a crypto market maker firm.

Prior, Michael served as the head of Trading at Cumberland, DRW’s digital-currency

Parsons has been

a leader in the exchange traded product industry for over twenty years.

Most recently.

served as the Global Head of Sales in

the iShares business of Barclays Global Investors (BGI).

Parsons has been a leader

in the exchange traded product industry for over twenty years.

Most recently, J.

served as the Global Head of Sales in the iShares

business of Barclays Global Investors (“BGI”).

Family Relationships

There are no family relationships

among any of our directors and executive officers.

Corporate Governance – Code of Ethics

The Sponsor’s Code

of Ethics (“Code”), adopted on May 18, 2022, as amended on June 22, 2022, which prohibits officers and employees of

the Sponsor from trading directly with the Trust (and neither the Sponsor nor any affiliate of the Sponsor trades directly with

In addition, the Code requires that any trading of $25,000 or more of Bitcoin within a 24-hour period must be reported

to the Chief Compliance Officer within two business days following such trades, and all Bitcoin transactions are reported to the

Chief Compliance Officer quarterly.

Officers and employees of the Sponsor are also prohibited from buying or selling Bitcoin during

Trade Restriction Windows, which are intended to occur on days the Trust is issuing new Units at NAV.

Finally, officers and employees

of the Sponsor are required to pre-clear all secondary market trades in OBTC.

In light of these internal controls, and the depth

and liquidity of BTC-USD trading on the Principal market, no officer, employee or affiliate of the Sponsor is in a position to

impact materially the BTC-USD price on the Principal Market, and therefore the holdings by any such person should not be material

to investors.

Code is available by writing the Sponsor at 1241 Post Road, Second Floor, Fairfield, Connecticut 06824 or calling the Sponsor at

(914) 214-4697.

The Sponsor’s Code of Ethics is intended to be a codification of the business and ethical principles that

guide the Sponsor, and to deter wrongdoing, to promote honest and ethical conduct, to avoid conflicts of interest, and to foster

compliance with applicable governmental laws, rules and regulations, the prompt internal reporting of violations and accountability

for adherence to the Code of Ethics.

Executive Compensation

Not applicable.

Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners

and Management and Related Stockholder Matters

Securities Authorized for Issuance under Equity Compensation

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Security Ownership of Certain Beneficial Owners and Management

The following table

sets forth certain information with respect to the beneficial ownership of the Units for:

each person that, to the Sponsor’s knowledge based solely on the records of the Transfer Agent, owns beneficially a significant portion of the Units;

The following table sets

forth certain information with respect to the beneficial ownership of the Units for:

each person that, to the Sponsor’s knowledge based solely on the records of the Transfer Agent,

owns beneficially a significant portion of the Units;

each executive officer of the Sponsor individually;

all officers of the Sponsor as a group.

The number of Units

beneficially owned and percentages of beneficial ownership set forth below are based on the number of Units outstanding as of March 24, 2022 and do not take into account ownership of the Units held through Cede & Co., a nominee of DTC, for which there is

no publicly available information.

The number of Units beneficially

owned and percentages of beneficial ownership set forth below are based on the number of Units outstanding as of [January 5, 2023]

and do not take into account ownership of the Units held through Cede & Co., a nominee of DTC, for which there is no publicly

available information.

Name and Address of Beneficial Owner

Percentage of

Significant Unitholders:

Celsius Network Ltd.

Executive Officers of the Sponsor:

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Executive officers of the Sponsor as a group

(1) The Trust does not have any directors, officers or

Under the Trust Agreement, all management functions of the Trust have been delegated to and are conducted by the Sponsor,

its agents and its affiliates.

(1) The Trust does not have any directors, officers or employees.

Under the Trust Agreement, all management functions of the Trust have been delegated to and are conducted by the Sponsor, its agents

and its affiliates.

Represents beneficial ownership of less than 1%.

The business address for Celsius Network

is 1 Bartholomew Lane, London, EC2N 2AX UK.

Alexander Mashinsky is the CEO and controlling shareholder of Celsius Network

The business address for each executive officer of the Sponsor is c/o Osprey Funds, LLC, 520 White Plains Road, Suite 500,

Tarrytown, New York 10591.

Certain Relationships and

Related Transactions and Director Independence

The Sponsor has

not established formal procedures to resolve all potential conflicts of interest.

Consequently, investors may be dependent on the

good faith of the respective parties subject to such conflicts to resolve them equitably.

Although the Sponsor attempts to monitor

these conflicts, it is extremely difficult, if not impossible, for the Sponsor to ensure that these conflicts do not, in fact,

result in adverse consequences to the Trust.

Prospective investors

should be aware that the Sponsor presently intends to assert that Unitholders have, by subscribing for Units of the Trust, consented

to the following conflicts of interest in the event of any proceeding alleging that such conflicts violated any duty owed by the

Sponsor to investors.

The Sponsor has

a conflict of interest in allocating its own limited resources among, when applicable, different clients and potential future business

ventures, to each of which it owes fiduciary duties.

Additionally, the professional staff of the Sponsor also services other affiliates

of the Trust, including, Rex Shares, LLC, a company under common control with the Sponsor.

The business address for each executive officer

of the Sponsor is c/o Osprey Funds, LLC, 1241 Post Road, 2nd Floor Fairfield, CT 06824.

Certain Relationships and Related Transactions

and Director Independence

The Sponsor has not established

formal procedures to resolve all potential conflicts of interest.

Consequently, investors may be dependent on the good faith of

the respective parties subject to such conflicts to resolve them equitably.

Although the Sponsor attempts to monitor these conflicts,

it is extremely difficult, if not impossible, for the Sponsor to ensure that these conflicts do not, in fact, result in adverse

consequences to the Trust.

Prospective investors should

be aware that the Sponsor presently intends to assert that Unitholders have, by subscribing for Units of the Trust, consented to

the following conflicts of interest in the event of any proceeding alleging that such conflicts violated any duty owed by the Sponsor

to investors.

The Sponsor has a conflict

of interest in allocating its own limited resources among, when applicable, different clients and potential future business ventures,

to each of which it owes fiduciary duties.

Additionally, the professional staff of the Sponsor also services other affiliates of

the Trust, including, Rex Shares, LLC, a company under common control with the Sponsor.

Although the Sponsor and its professional

2 unchanged sentences

the affairs of the Trust consistent with its or their respective fiduciary duties to the Trust and others.

Although the Sponsor

does not engage in trading Bitcoin with the Trust, the Sponsor may receive from the Trust Bitcoin to be used to pay certain Trust

expenses, including without limitation, the Custodial fee.

In such circumstances, the Sponsor will price the Bitcoin received from

the Trust at the Bitcoin Market Price on the day it is received and convert the Bitcoin received into cash to be used to pay Trust

The Sponsor typically receives its Management Fee in Bitcoin, valued at the Bitcoin Market Price on the day such Management

Accounting Fees and Services

The Sponsor in its discretion, waived

audit fees for the year ended December 31, 2021, and 2020.

Fees for services performed by Grant Thornton LLP for the years ended

December 31, 2021 and 2020 were:

Although the Sponsor does

not engage in trading Bitcoin with the Trust, the Sponsor may receive from the Trust Bitcoin to be used to pay certain Trust expenses,

including without limitation, the Custodial fee.

In such circumstances, the Sponsor will price the Bitcoin received from the Trust

at the Bitcoin Market Price on the day it is received and convert the Bitcoin received into cash to be used to pay Trust expenses.

The Sponsor typically receives its Management Fee in Bitcoin, valued at the Bitcoin Market Price on the day such Management Fee

Principal Accounting Fees and Services

The Sponsor in its discretion, waived audit fees

for the year ended December 31, 2022, and 2021.

Fees for services performed by Grant Thornton LLP for the years ended December

31, 2022 and 2021 were:

Audit-related fees

the table above, in accordance with the SEC’s definitions and rules, Audit Fees are fees paid to Grant Thornton LLP

for professional services for the audit of the Trust’s financial statements included in annual

and quarterly OTC Market filings, as well as financial statements included in the quarterly reports on the SEC’s Form 10-Q,

and for services that are normally provided by the accountants in connection with regulatory filings

or engagements.

Pre-Approved Policies and

The Trust has no board of directors, and as a result, has no audit committee or pre-approval policy with respect

to fees paid to its principal accounting firm.

Such determinations, including for the fiscal year ended December 31, 2021, are

made by the Sponsor .

and Financial Statements Schedules

All Other Fees

In the table above, in accordance

with the SEC’s definitions and rules, Audit Fees are fees paid to Grant Thornton LLP for professional services for the audit

of the Trust’s annual financial statements, as well as the review of financial statements included in the Trust’s Form

10-Q, and for services that are normally provided by the accountants in connection with regulatory filings or engagements.

Pre-Approved Policies and Procedures

The Trust has no board of directors, and as a

result, has no audit committee or pre-approval policy with respect to fees paid to its principal accounting firm.

Such determinations,

including for the fiscal year ended December 31, 2022, are made by the Sponsor.

Exhibits and Financial Statements Schedules

Financial Statements

to Financial Statements on Page F-1 for a list of the financial statements being filed herein.

See Index to Financial Statements on Page F-1 for a list of the

financial statements being filed herein.

Financial Statement Schedules

Schedules have been omitted since they

are either not required, not applicable, or the information has otherwise been included.

Schedules have been omitted since they are either not required,

not applicable, or the information has otherwise been included.

Exhibit Description

Second Amended and Restated Declaration of Trust and Trust Agreement (incorporated by reference Exhibit 4.1 of the Registration Statement on Form 10 filed by the Registrant on July 8, 2021)

Description of Units

Custodial Services Agreement, dated May 18, 2020, between Osprey Bitcoin Trust and Fidelity Digital Asset Services, LLC (incorporated by reference to Exhibit 10.1 of the Registration Statement on Form 10 filed by the Registrant on July 8, 2021)

Index Provider Agreement (incorporated by reference to Exhibit 10.2 of the Amendment No.

1 to Registration Statement on Form 10 filed by the Registrant on September 10, 2021)

Transfer Agency and Registrar Service Agreement (incorporated by reference to Exhibit 10.3 of the Amendment No.

1 to Registration Statement on Form 10 filed by the Registrant on September 10, 2021)

Form of Subscription Agreement (incorporated by reference to Exhibit 10.4 of the Amendment No.

1 to Registration Statement on Form 10 filed by the Registrant on September 10, 2021)

Administration Agreement (incorporated by reference to Exhibit 10.5 of the Amendment No.

1 to Registration Statement on Form 10 filed by the Registrant on September 10, 2021)

Custodial Services Agreement, dated as of February 4, 2022, between Osprey Bitcoin Trust and Coinbase Custody Trust Company, LLC (incorporated by reference to Exhibit 10.1 of the Form 8-K filed by the Registrant on February 10, 2022)

Amended and Restated Declaration of Trust and Trust Agreement (incorporated by reference to Exhibit 4.1 of the Registration

Statement on Form 10 filed by the Registrant on September 21, 2022)

of Units (incorporated by reference to Exhibit 4.6 on Form 10-K filed by the Company on March 30, 2022.

Services Agreement, dated May 18, 2020, between Osprey Bitcoin Trust and Fidelity Digital Asset Services, LLC (incorporated

by reference to Exhibit 10.1 of the Registration Statement on Form 10 filed by the Registrant on July 8, 2021)

Provider Agreement (incorporated by reference to Exhibit 10.2 of the Amendment No.

1 to Registration Statement on Form 10

filed by the Registrant on September 10, 2021)

Agency and Registrar Service Agreement (incorporated by reference to Exhibit 10.3 of the Amendment No.

1 to Registration Statement

on Form 10 filed by the Registrant on September 10, 2021)

of Subscription Agreement (incorporated by reference to Exhibit 10.4 of the Amendment No.

1 to Registration Statement on Form

10 filed by the Registrant on September 10, 2021)

Administration

Agreement (incorporated by reference to Exhibit 10.5 of the Amendment No.

1 to Registration Statement on Form 10 filed by

the Registrant on September 10, 2021)

Services Agreement, dated as of February 4, 2022, between Osprey Bitcoin Trust and Coinbase Custody Trust Company, LLC (incorporated

by reference to Exhibit 10.1 of the Form 8-K filed by the Registrant on February 10, 2022)

Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934

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Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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* Filed herewith.

† Certain schedules or similar attachments

have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

The Trust agrees to furnish supplemental copies of any of the omitted

schedules or attachments upon request by the Securities and Exchange Commission.

† Certain schedules or similar attachments have been omitted

pursuant to Item 601(a)(5) of Regulation S-K.

The Trust agrees to furnish supplemental copies of any of the omitted schedules or

attachments upon request by the Securities and Exchange Commission.

Form 10-K Summary

Not applicable.

Pursuant to the

requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned in the capacities* indicated, thereunto duly authorized.

Pursuant to the requirements

of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on

its behalf by the undersigned in the capacities* indicated, thereunto duly authorized.

Osprey Funds, LLC as Sponsor of Osprey Bitcoin Trust

4 unchanged sentences

March 21, 2023

The Registrant is a trust and the persons are signing in their capacities as officers or directors of Osprey Funds, LLC, the Sponsor of the Registrant.

INDEX TO FINANCIAL STATEMENTS

The Registrant is a trust and the persons are signing in their capacities as officers or directors

of Osprey Funds, LLC, the Sponsor of the Registrant.

TO FINANCIAL STATEMENTS

Osprey Bitcoin Trust - Annual Financial Statements

Report of Independent Registered Public Accounting Firm

Statements of Assets and Liabilities at December 31, 2021 and 2020

Schedules of Investment at December 31, 2021 and 2020

Statements of Operations for the years ended December 31, 2021 and 2020

Independent Registered Public

Accounting Firm

Statements of

Assets and Liabilities

at December 31,

2022 and 2021

Schedules of Investment at December 31,

2022 and 2021

Statements of

Operations for the years

ended December 31, 2022

Statements of Changes in Net Assets for the years ended December 31, 2022 and 2021

Notes to Financial Statements

the Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

2 unchanged sentences

Opinion on the financial statements

We have audited the accompanying statements of assets

and liabilities, including the schedules of investment, of Osprey Bitcoin Trust (a Delaware Statutory Trust) (the “Trust”)

as of December 31, 2021 and 2020, and the related statements of operations and changes in net assets for each of the two

years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust

as of December 31, 2021 and 2020, and the results of its operations for each of the two

years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United

States of America.

We have audited the accompanying statements

of assets and liabilities, including the schedules of investment, of Osprey Bitcoin Trust (a Delaware Statutory Trust) (the

“Trust”) as of December 31, 2022 and 2021, and the related statements of

operations and changes in net assets for each of the two years in the period ended December 31, 2022, and the related

notes (collectively referred to as the “financial statements”).

In our opinion,

the financial statements present fairly, in all material respects, the financial position of the Trust as

of December 31, 2022 and 2021, and the results of its operations for each of the two years

in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of

Basis for opinion

These financial statements are the responsibility of

the Trust’s management.

Our responsibility is to express an opinion on the Trust’s financial statements based

on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)

(“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement, whether due to error or fraud.

The Trust is not required to

have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing

an opinion on the effectiveness of the Trust’s internal control over financial reporting.

Accordingly, we express

no such opinion.

Our audits included performing procedures to assess the

risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that

respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures

in the financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates

made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide

a reasonable basis for our opinion.

These financial statements are the responsibility of the Trust’s

Our responsibility is to express an opinion on the Trust’s financial statements based on our audits.

public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and

are required to be independent with respect to the Trust in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

The Trust is not required to have, nor were we engaged to perform,

an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of

internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Trust’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks

of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial

Our audits also included evaluating the accounting principles used and significant estimates made by management, as

well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis

for our opinion.

/s/ GRANT THORNTON LLP

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Statements of Assets and Liabilities

December 31, 2021 and December 31, 2020

December 31, 2022 and 2021

(Amounts in U.S.

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$ 129,756,984

$ 129,757,241

Subscriptions received in advance

Management Fee payable

Due to Sponsor

Other payable

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( 2,316,820 )

( 1,197,493 )

Accumulated net realized gain on investment in Bitcoin

Accumulated net change in unrealized appreciation on investment in Bitcoin

Accumulated net change in unrealized appreciation

(depreciation) on investment in Bitcoin

( 29,558,239 )

$ 129,673,168

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

Net asset value per Unit

* Units have been adjusted retroactively to reflect the 4:1 stock

split effective January 5, 2021.

The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part

of these financial statements.

Osprey Bitcoin Trust

Schedules of Investment

December 31, 2021 and December 31, 2020

December 31, 2022 and 2021

(Amounts in U.S.

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(cost $ 75,816,514 )

$ 129,756,984

Liabilities, less cash

Liabilities, less cash and other assets

$ ( 238,665 )

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(cost $ 75,945,739 )

$ 129,756,984

Liabilities, less cash

The accompanying notes are an integral part of these financial statements.

$ 129,673,168

The accompanying notes are an integral part

of these financial statements.

Osprey Bitcoin Trust

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Management Fee

Professional fees

Custodian fees

Total expenses

Other expenses waived by the Sponsor

Professional fees waived by the Sponsor

Net investment loss

Net realized gain and net change in unrealized appreciation on investment in Bitcoin

( 1,119,327 )

Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investment in Bitcoin

Net realized gain on investment in Bitcoin

Net change in unrealized appreciation on investment in Bitcoin

Total net realized gain and net change in unrealized appreciation on investment in Bitcoin

Net increase in net assets resulting from operations

The accompanying notes are an integral part of these financial statements.

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

( 83,373,064 )

Total net realized gain (loss) and net change in unrealized appreciation (depreciation) on investment in Bitcoin

( 82,539,061 )

Net increase (decrease) in net assets resulting from operations

$ ( 83,658,388 )

The accompanying notes are an integral part

of these financial statements.

Osprey Bitcoin Trust

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dollars, except units issued and outstanding)

Increase in net assets from operations

Increase (decrease) in net assets from operations

Net investment loss

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Net realized gain on investment in Bitcoin

Net change in unrealized appreciation on investment in Bitcoin

Net increase in net assets resulting from operations

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

( 83,373,064 )

Net increase (decrease) in net assets resulting from operations

( 83,658,388 )

Increase in net assets from capital transactions

Subscriptions

Net Increase in net assets

Net assets at the beginning of the year

Net assets at the end of the year

Net Increase (decrease) in net assets

( 83,658,388 )

Net assets at the beginning of the period

Net assets at the end of the period

$ 129,673,168

Change in units issued and outstanding

Units issued and outstanding at the beginning of the year

Units issued and outstanding at the beginning of the period

Subscriptions

Units issued and outstanding at the end of the year

* Units have been adjusted retroactively to reflect the 4:1 stock

split effective January 5, 2021.

The accompanying notes are an integral part of these financial statements.

Units issued and outstanding at the end of the period

* Units have been adjusted retroactively to reflect the 4:1 Unit split effective January 5, 2021.

The accompanying notes are an integral part

of these financial statements.

Osprey Bitcoin Trust

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Osprey Bitcoin Trust (the “Trust”)

is a Delaware Statutory Trust that was formed on January 3, 2019 and commenced operations on January 22, 2019 and is governed

by the Second Amended and Restated Declaration of Trust and Trust Agreement (the “Trust Agreement”) dated November

In general, the Trust holds Bitcoin and, from time to time, issues common units of fractional undivided beneficial interest

(“Units”) in exchange for Bitcoin.

The investment objective of the Trust is for the Units to track the price of Bitcoin,

less liabilities and expenses of the Trust.

The Units are designed as a convenient and cost-effective method for investors to gain

investment exposure to Bitcoin, similar to a direct investment in Bitcoin.

is a Delaware Statutory Trust, formed on January 3, 2019, which commenced operations on January 22, 2019 and is governed by the

Second Amended and Restated Declaration of Trust and Trust Agreement dated November 1, 2020, as amended by the Amendment to Trust

Agreement dated April 15, 2022 (the “Trust Agreement”).

In general, the Trust holds Bitcoin and, from time to time,

issues common units of fractional undivided beneficial interest (“Units”) in exchange for Bitcoin.

The investment objective

of the Trust is for the Units to track the price of Bitcoin, less liabilities and expenses of the Trust.

The Units are designed

as a convenient and cost-effective method for investors to gain investment exposure to Bitcoin, similar to a direct investment

Osprey Funds, LLC (the “Sponsor”)

acts as the sponsor of the Trust.

The Sponsor is responsible for the day-to-day administration of the Trust pursuant to the provisions

of the Trust Agreement.

The Sponsor is responsible for preparing and providing annual reports on behalf of the Trust to investors

and is also responsible for selecting and monitoring the Trust’s service providers.

As consideration for the Sponsor’s

services, the Trust pays the Sponsor a Management Fee as discussed in Notes 2 and 5.

The Trust’s original Custodian

was Xapo, Inc.

(“Xapo”), a third- party provider (Xapo was acquired by Coinbase Custody Trust Company, LLC during 2019).

During March 2020, the Trust changed custodians from Xapo to Unchained Capital.

During June 2020, the Trust changed custodians

to Fidelity Digital Asset Services, LLC’s (the “Custodian”).

Other funds under the Osprey name are also managed by the Sponsor.

The Sponsor is responsible

for the day-to-day administration of the Trust pursuant to the provisions of the Trust Agreement.

The Sponsor is responsible for

preparing and providing annual reports on behalf of the Trust to investors and is also responsible for selecting and monitoring

the Trust’s service providers.

As consideration for the Sponsor’s services, the Trust pays the Sponsor a Management

Fee (as defined herein) as discussed in Notes 2 and 5.

Fidelity Digital Asset Services,

LLC was the custodian for the Trust as of and for the year ended December 31, 2021.

During March 2022, the Trust changed custodians

to Coinbase Custody Trust Company, LLC (the “Custodian”).

The Custodian is responsible for safeguarding the Bitcoin

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Units and the maintaining of certain records therewith.

Osprey Bitcoin Trust

Notes to the Financial Statements

As of December 31, 2021

Summary of Significant Accounting Policies

Basis of Presentation

The financial statements are

expressed in US dollars and have been prepared in accordance with generally accepted accounting principles in the United States

The Trust qualifies as an investment company for accounting purposes pursuant to the accounting and reporting

guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)

Topic 946, Financial Services – Investment Companies.

The Trust is not registered under the U.S.

Securities and Exchange

Commission (“SEC”) Investment Company Act of 1940.

The financial statements are expressed

in US dollars and have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).

The Trust qualifies as an investment company for accounting purposes pursuant to the accounting and reporting guidance under Financial

Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services

– Investment Companies.

The Trust is not registered with U.S.

Securities and Exchange Commission (“SEC”) under

the Investment Company Act of 1940.

Use of Estimates

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The most significant

estimate in the financial statements is the fair value of investments.

Actual results could differ from those estimates and these

differences could be material.

Cash is received by the Trust

from investors and converted into Bitcoin for investment.

Cash held by the Trust represents deposits maintained with Signature

Bank (New York).

estimate in the financial statements is the fair value of investments in Bitcoin.

Actual results could differ from those estimates

and these differences could be material.

Cash is received by the Trust from

investors and converted into Bitcoin for investment.

Cash held by the Trust represents deposits maintained with Signature Bank

At times, bank deposits may be in excess of federally insured limits.

In accordance with ASC 230 “Statement

of Cash Flows”, the Trust qualifies for an exemption from the requirement to provide a statement of cash flows and has elected

In accordance with ASC 230 “Statement of

Cash Flows”, the Trust qualifies for an exemption from the requirement to provide a statement of cash flows and has elected

not to provide a statement of cash flows.

Subscriptions and Redemptions of Units

Subscriptions and Redemptions

Proceeds received by the Trust

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dollars, if necessary) to pay the Trust’s expenses, (3) distributed to Accredited Investors (subject to

obtaining regulatory approval from the Securities and Exchange Commission (“SEC”) described below) in connection with

the redemption of Units, (4) distributed (or converted to U.S.

dollars, prior to distribution, to Unitholders as dividends, and

(5) liquidated in the

Osprey Bitcoin Trust

Notes to the Financial Statements

As of December 31, 2021

event that the Trust terminates or as otherwise required by law or regulation.

obtaining regulatory approval from the SEC described below) in connection with the redemption of Units, (4) distributed (or converted

dollars, prior to distribution, to Unitholders as dividends, and (5) liquidated in the event that the Trust terminates

or as otherwise required by law or regulation.

The Trust conducts its transactions

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interest in the Trust.

154,183 Units were sold to both accredited and non-accredited investors in an offering of to $ 5,000,000

154,183 Units were sold to both accredited and non-accredited investors in an offering of up to $ 5,000,000

of Units, dated June 1, 2020, registered in Connecticut and qualified in New York, pursuant to Rule 504 of Regulation D under the

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closed on August 12, 2020.

These Units have been adjusted retroactively to reflect the 4:1 stock split effective January 5, 2021.

On November 12, 2020, the Trust

began an offering of an unlimited number of Units pursuant to Rule 506(c) under the Securities Act (“November 2020 Offering”).

4,206,224 Units were sold pursuant to the November 2020 Offering.

These Units have been adjusted retroactively to reflect the 4:1

stock split effective January 5, 2021.

4,206,224 Units were sold in the November 2020 Offering.

On December 30, 2020, the Sponsor

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The effective date of the split was January 5, 2021.

The Units that were issued in the Rule 504 Offering

and the November 2020 Offering were adjusted retroactively to reflect the 4:1 Unit split effective January 5, 2021.

On January 14, 2021, the Financial

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trading in the OTCQX tier of the OTC Market, under the ticker symbol “OBTC.”

As of December 31, 2021, there

were 8,340,536 Units issued and outstanding.

3,350,172 of the Units are restricted securities that may not be resold absent registration

or an exemption from registration under the Securities Act, and 4,990,364 of the Units are unrestricted securities.

Effective November 1, 2021, the

Trust suspended the November 2020 Offering under Rule 506(c) under the Securities Act.

The Trust is currently unable

to redeem Units.

As of December 31, 2022, there

were 8,340,536 Units issued and outstanding.

161,444 of the Units

are restricted securities that

may not be resold absent registration or an exemption from registration under the Securities Act, and 8,179,092 of the Units are

unrestricted securities.

The Trust is currently unable to

redeem Units.

At some date in the future, the Trust may seek approval from the SEC to operate an ongoing redemption program.

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Revenue Recognition

The Trust identifies Bitcoin

as an “other investment” in accordance with ASC 946.

The Trust records its investment transactions on a trade date

basis and changes in fair value are reflected as the net change in unrealized appreciation or depreciation on investments.

gains and losses are calculated using a first in first out method.

Realized gains and losses are recognized in connection with

transactions including settling obligations for the Management Fee and other expenses in Bitcoin.

Osprey Bitcoin Trust

Notes to the Financial Statements

As of December 31, 2021

The Trust identifies Bitcoin as

an “other investment” in accordance with ASC 946.

The Trust records its investment transactions on a trade date basis

and changes in fair value are reflected as the net change in unrealized appreciation or depreciation on investments.

Realized gains

and losses are calculated using a first in first out method.

Realized gains and losses are recognized in connection with transactions

including settling obligations for the Management Fee and other expenses in Bitcoin.

Management Fee

The Trust is expected to pay

the remuneration due to the Sponsor (the “Management Fee” or “Sponsor Fee”).

Effective November 1, 2020,

the Management Fee changed to an annual rate of 0.49 % of the daily Net Asset Value of the Trust and accrues daily in Bitcoin.

to November 1, 2020, the Management Fee equaled an annual rate of 0.99 % of the daily Net Asset Value of the Trust and accrued daily

The Management Fee is payable at the Sponsor’s sole discretion, in Bitcoin or in U.S.

Dollars for the Bitcoin

market price in effect for such Bitcoin at the time of payment.

The Trust is expected to pay the

remuneration due to the Sponsor (the “Management Fee” or “Sponsor Fee”).

The Management Fee is charged

by Sponsor to the Trust at an annual rate of 0.49 % of the daily Net Asset Value of the Trust and accrues daily in Bitcoin.

Management Fee is payable at the Sponsor’s sole discretion, in Bitcoin or in U.S.

Dollars for the Bitcoin Market Price (as

defined herein) in effect for such Bitcoin at the time of payment.

Trust Expenses

In accordance with its Trust

Agreement, the Sponsor bears the routine operational, administrative and other ordinary administrative operating expenses of the

Trust as “Assumed Expenses” other than audit fees, index license fees, aggregate legal fees in excess of $50,000 and

the fees of the Custodian (revised “Excluded Expenses”) and certain extraordinary expenses of the Trust, including

but not limited to taxes and governmental charges, expenses and costs, expenses and indemnities related to any extraordinary services

performed by the Sponsor (or any other service provider, including the Delaware Trust Company (the “Trustee”)) on behalf

of the Trust to protect the Trust or the interest of Unitholders, indemnification expenses, fees and expenses related to public

trading on OTCQX (“Extraordinary Expenses”).

In accordance with the Trust Agreement,

the Sponsor bears the routine operational, administrative and other ordinary administrative operating expenses of the Trust (the

“Assumed Expenses”) other than audit fees, index license fees, aggregate legal fees in excess of $50,000 per annum

and the fees of the Custodian ( “Excluded Expenses”) and certain extraordinary expenses of the Trust, including but

not limited to taxes and governmental charges, expenses and costs, expenses and indemnities related to any extraordinary services

performed by the Sponsor (or any other service provider, including the Trustee) on behalf of the Trust to protect the Trust or

the interest of Unitholders, indemnification expenses, fees and expenses related to public trading on OTCQX (“Extraordinary

Other expenses reported on the accompanying statements of operations is comprised of Excluded Expenses.

Fair Value Measurements

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(i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

ASC 820-10 requires the

Trust to assume that Bitcoin is sold in its principal market to market participants or, in the absence of a principal market, the

most advantageous market.

Principal market is the market with the greatest volume and level of activity for Bitcoin, and the most

advantageous market is defined as the market that maximizes the amount that would be received to sell the asset or minimizes the

amount that would be paid to transfer the liability, after taking into account transaction costs.

The Principal Market is generally

selected based on the most liquid and reliable exchange (including consideration of the ability for the Trust to access the specific

market, either directly or through an intermediary, at the end of each period).

The Sponsor has identified Coinbase Pro as the

principal market for Bitcoin.

requires the Trust to assume that Bitcoin is sold in its principal market to market participants or, in the absence of a principal

market, the most advantageous market.

Principal market is the market with the greatest volume and level of activity for Bitcoin,

and the most advantageous market is defined as the market that maximizes the amount that would be received to sell the asset or

minimizes the amount that would be paid to transfer the liability, after taking into account transaction costs.

The principal market

is generally selected based on the most liquid and reliable exchange (including consideration of the ability for the Trust to access

the specific market, either directly or through an intermediary, at the end of each period).

The Sponsor has identified Coinbase

Pro as its principal market for Bitcoin.

GAAP utilizes a fair value hierarchy

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on unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access.

valuations are based on quoted prices that are

Osprey Bitcoin Trust

Notes to the Financial Statements

As of December 31, 2021

readily and regularly available in an active market, these valuations do not entail

valuations are based on quoted prices that are readily and regularly available in an active market, these valuations do not entail

a significant degree of judgment.

3 unchanged sentences

on inputs that are unobservable and significant to the overall fair value measurement.

The availability of valuation

techniques and observable inputs can vary by investment.

To the extent that valuations are based on sources that are less observable

or unobservable in the market, the determination of fair value requires more judgment.

Fair value estimates do not necessarily

represent the amounts that may be ultimately realized by the Trust.

The availability of valuation techniques

and observable inputs can vary by investment.

To the extent that valuations are based on sources that are less observable or unobservable

in the market, the determination of fair value requires more judgment.

Fair value estimates do not necessarily represent the amounts

that may be ultimately realized by the Trust.

Definition of Net Asset Value

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New York time.

The Trust will also calculate the NAV per Unit of the Trust daily, which equals the NAV of the Trust divided by the number of outstanding

Units (the “NAV per Unit”).

The Trust will also calculate the

NAV per Unit of the Trust daily, which equals the NAV of the Trust divided by the number of outstanding Units (the “NAV per

The Trust considers 4:00 p.m.

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Investment in Bitcoin

$ 129,756,984

Fair Value Measurement Category

1 unchanged sentence

Investment in Bitcoin

The Trust determined the fair

value per Bitcoin using the price provided at 4:00 p.m., New York time, by Coinbase Pro as the Trust’s principal market.

The Trust’s liabilities

accrued in Bitcoin are converted into United States dollar amounts at the period-end Bitcoin price.

The Trust determined the fair value

per Bitcoin using the price provided at 4:00 p.m., New York time, by Coinbase Pro as the Trust’s principal market.

The Management Fee payable accrued

in Bitcoin is converted into United States dollar amount at the period-end Bitcoin Market Price.

The fluctuations arising from

the effect of changes in liabilities denominated in Bitcoin are included with the net realized or unrealized appreciation or depreciation

the effect of changes in liability denominated in Bitcoin are included with the net realized or unrealized appreciation or depreciation

on investment in Bitcoin in the statements of operations.

Osprey Bitcoin Trust

Notes to the Financial Statements

As of December 31, 2021

The following represents the

changes in quantity and the respective fair value of Bitcoin for the year ended December 31, 2021:

The following represents the changes

in quantity and the respective fair value of Bitcoin for the year ended December 31, 2022:

Balance at January 1, 2022

$ 129,756,984

Bitcoin distributed for Management Fee, related party

Bitcoin distributed for other fees

Subscriptions

Net realized gain on investment in Bitcoin

Net change in unrealized appreciation on investment in Bitcoin

Balance at December 31, 2021

Net change in unrealized depreciation on investment in Bitcoin

( 83,374,314 )

Balance at December 31, 2022

Net realized gain on the transfer

of Bitcoins to pay the Management Fee and other expenses for the year ended December 31, 2022, was $ 834,003 , which includes $ 809,988

net realized gain on investment in Bitcoin, and $ 17,300 net realized loss resulted from the changes in liabilities denominated

Net change in unrealized appreciation on investment in Bitcoin for the year ended December 31, 2021, was $ 16,857,832 ,

which includes net change in unrealized appreciation on investment in Bitcoin of $ 16,844,774 , and $ 13,058 net unrealized appreciation

due to changes in value of liabilities

The following represents the

changes in quantity and the respective fair value of Bitcoin for the year ended December 31, 2020:

net realized gain on investment in Bitcoin, and $ 24,015 net realized gain resulted from the changes in liabilities denominated

Net change in unrealized depreciation on investment in Bitcoin for the year ended December 31, 2022, was $ 83,373,064 ,

which includes net change in unrealized depreciation on investment in Bitcoin of $ 83,374,314 , and $ 1,250 net unrealized appreciation

due to changes in value of liabilities denominated in Bitcoin.

The following represents the changes

in quantity and the respective fair value of Bitcoin for the year ended December 31, 2021:

Balance at January 1, 2021

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Balance at December 31, 2021

$ 129,756,984

Net realized gain on the transfer

of Bitcoins to pay the Management Fee and other expenses for the year ended December 31, 2020, was $ 18,466 .

Net change in unrealized

appreciation on investment in Bitcoin for year ended December 31, 2020 was $ 32,044,385 .

The Trust is grantor trust for

of Bitcoins to pay the Management Fee and other expenses for the year ended December 31, 2021, was $ 12,335 , which includes $ 29,635

net realized gain on investment in Bitcoin, and $ 17,300 net realized loss resulted from the changes in liabilities denominated

Net change in unrealized appreciation on investment in Bitcoin for the year ended December 31, 2021, was $ 16,857,832 ,

which includes net change in unrealized appreciation on investment in Bitcoin of $ 16,844,774 , and $ 13,058 net unrealized appreciation

due to changes in value of liabilities denominated in Bitcoin.

The Trust is a grantor trust for

federal income tax purposes.

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owner of Units will be treated as directly owning its pro rata share of the Trust’s assets and a pro rata portion of the

Trust’s income, gain, losses and deductions will “flow through” to each beneficial owner of Units.

Osprey Bitcoin Trust

Notes to the Financial Statements

As of December 31, 2021

In accordance with GAAP, the Trust has

defined the threshold for recognizing the benefits of tax return positions in the financial statements as

“more-likely-than-not” to be sustained by the applicable taxing authority and requires measurement of a tax

position meeting the “more-likely-than-not” threshold, based on the largest benefit that is more than 50% likely

to be realized.

As of December 31, 2021, the Trust did not have a liability for any unrecognized tax amounts

for uncertain tax positions related to federal, state, and local income taxes.

Trust’s income, gain,

losses and deductions will “flow

through” to each beneficial owner of Units.

In accordance with GAAP, the Trust

has defined the threshold for recognizing the benefits of tax return positions in the financial statements as “more-likely-than-not”

to be sustained by the applicable taxing authority and requires measurement of a tax position meeting the “more-likely-than-not”

threshold, based on the largest benefit that is more than 50% likely to be realized.

As of December 31, 2022, the Trust did not

have a liability for any unrecognized tax amounts for uncertain tax positions related to federal, state, and local income taxes.

However, the conclusions concerning

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and interpretations thereof.

The Sponsor of the Trust has

evaluated whether or not there are uncertain tax positions that require financial statement recognition and has determined that

no reserves for uncertain tax positions related to federal, state and local income taxes existed as of December 31, 2021 and December

The Sponsor of the Trust has evaluated

whether or not there are uncertain tax positions that require financial statement recognition and has determined that no reserves

for uncertain tax positions related to federal, state and local income taxes existed as of December 31, 2022 and December 31, 2021.

The Trust’s 2020, 2021, and 2022 tax returns are subject to audit by federal, state and local tax authorities.

Related Parties

Osprey Fund LLC and REX Shares,

LLC, which is under common control with the Sponsor, are related parties of the Trust.

The Trust is responsible for

custody and index fees, which are included in other expenses in the statement of operations and are paid by the Sponsor on behalf

of the Trust.

For the years ended December 31, 2021, and 2020 the Trust reimbursed the Sponsor the expenses in the amount of $ 314,213

and $ 31,260 , respectively.

The Sponsor pays certain expenses

on behalf of, and is reimbursed by, the Trust.

For the years ended December 31, 2022, and 2021 the Trust reimbursed the Sponsor

the expenses in the amount of $ 531,601 and $ 314,213 , respectively.

As of December 31, 2022 and 2021, $ 166,804 and $ 0 of expenses

remain payable to the Sponsor, respectively, which are recorded as due to the Sponsor in the accompanying statements of assets

and liabilities.

The outstanding payable is comprised mostly of expenses related to insurance.

The Sponsor in its discretion,

may elect to reduce, or waive, the Trust’s expenses.

For the years ended December 31, 2021, and 2020, the Sponsor irrevocably

For years ended December 31, 2022, and 2021, the Sponsor irrevocably

waived $ 0 and $ 109,000 , respectively, of the Trust’s audit fees.

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As of December 31, 2022 and December 31, 2021, there were unpaid Management Fees of $ 19,213 and $ 53,985 ,

respectively, which are recorded in the accompanying statements of assets and liabilities.

The Trust’s Management

Fee is accrued daily in Bitcoins and will be payable, at the Sponsor’s sole discretion, in Bitcoins or in U.S.

the Bitcoin market price in effect at the time of such payment.

From inception through the year ended December 31, 2021, all Management

Fees have been made in Bitcoin to the Sponsor.

respectively, which are recorded as management fee payable in the accompanying statements of assets and liabilities.

The Trust’s Management Fee

is accrued daily in Bitcoins and will be payable, at the Sponsor’s sole discretion, in U.S.

dollars or in Bitcoins at the

Bitcoin market price in effect at the time of such payment.

From inception through December 31, 2022, all Management Fees have

been made in Bitcoin to the Sponsor.

Risks and Uncertainties

Investment in Bitcoin

Osprey Bitcoin Trust

Notes to the Financial Statements

As of December 31, 2021

The Trust is subject to various

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have been volatile and subject to influence by many factors including the levels of liquidity.

If Bitcoin exchanges continue

to experience significant price fluctuations, the Trust may experience losses.

Several factors may affect the price of Bitcoin,

including, but not limited to, global Bitcoin supply and demand, theft of Bitcoin from global exchanges or vaults, and competition

from other forms of digital currency or payment services.

The Bitcoin held by the Trust

are commingled and the Trust’s Unitholders have no specific rights to any specific Bitcoin.

In the event of the insolvency

of the Trust, its assets may be inadequate to satisfy a claim by its Unitholders.

There is currently no clearing house for

Bitcoin, nor is there a central or major depository for the custody of Bitcoin.

There is a risk that some or all of the Trust’s

Bitcoin could be lost or stolen.

The Trust does not have insurance protection on its Bitcoin which exposes the Trust and its Unitholders

to the risk of loss of the Trust’s Bitcoin.

If Bitcoin exchanges continue to

experience significant price fluctuations, the Trust may experience losses.

Several factors may affect the price of Bitcoin, including,

but not limited to, global Bitcoin supply and demand, theft of Bitcoin from global exchanges or vaults, and competition from other

forms of digital currency or payment services.

The Bitcoin held by the Trust are commingled and the Trust’s Unitholders have

no specific rights to any specific Bitcoin.

In the event of the insolvency of the Trust, its assets may be inadequate to satisfy

a claim by its Unitholders.

There is currently no clearing

house for Bitcoin, nor is there a central or major depository for the custody of Bitcoin.

There is a risk that some or all of the

Trust’s Bitcoin could be lost or stolen.

The Trust does not have insurance protection on its Bitcoin which exposes the Trust

and its Unitholders to the risk of loss of the Trust’s Bitcoin.

Further, Bitcoin transactions are irrevocable.

Stolen or incorrectly transferred

Bitcoin may be irretrievable.

As a result, any incorrectly executed Bitcoin transactions could adversely affect an investment

in the Trust.

incorrectly transferred Bitcoin may be irretrievable.

As a result, any incorrectly executed Bitcoin transactions could adversely

affect an investment in the Trust.

To the extent private keys for

5 unchanged sentences

affect the value of Bitcoin.

On March 11, 2020, the World

Health Organization officially declared COVID-19, the disease caused by the novel coronavirus, a pandemic.

Management is closely

monitoring the evolution of the pandemic, including how it may affect the economy and general population.

The Custodian

The digital assets owned by the

Trust are held by the Custodian and secured in a segregated custody account.

All digital asset private keys are stored in offline

storage, or “cold” storage.

“Cold” storage is a safeguarding method by which the private keys corresponding

to digital assets are disconnected and/or deleted entirely from the internet.

As a result of digital assets being stored in “cold”

storage, any withdrawal and subsequent transaction request to the Custodian by the Trust requires a twenty-four (24) hour prior

notice to process.

Such time delay between the withdrawal request and processing of the withdrawal may negatively impact the price

of the digital asset upon sale.

The Custodian provides the Trust with monthly account statements.

The Custodian is independent

from the Sponsor.

Indemnifications

5 unchanged sentences

Based on experience, the Trust would expect the risk of loss to be remote.

Osprey Bitcoin Trust

Notes to the Financial Statements

As of December 31, 2021

Financial Highlights

Per Unit Performance

(for a unit outstanding throughout the year)

Net asset value per

unit at beginning of year

Net increase (decrease) in

net assets resulting from operations

(for a unit outstanding throughout the period)

Net asset value per unit at beginning of period

Net increase (decrease) in net assets resulting from operations

Net realized gain (loss) and change in unrealized appreciation (depreciation) on investment

Net investment

Net investment loss

Net increase (decrease) in net assets resulting from operations

Net asset value per unit at end

Supplemental Data

Net asset value per unit at end of period

Ratios to average net asset value

Net investment loss

* The net asset value per unit has been adjusted to

retroactively reflect the 4:1 stock split effective January 5, 2021.

net asset value per unit has been adjusted to retroactively reflect the 4:1 Unit split effective January 5, 2021.

** Such percentages are after expenses waivers.

Sponsor voluntarily waived a portion of Other Expenses (equal to 0.09 % of average net assets).

individual Unitholder’s return, ratios, and per Unit performance may vary from those resented above based on the timing of

Unit transactions.

The Sponsor voluntarily waived a portion of Professional fees (equal to 0.09 % of

average net assets).

individual Unitholder’s return, ratios, and per Unit performance may vary from those presented above based on the timing

of Unit transactions.

Total return and ratios to average net asset value are calculated for the Unitholders taken as a whole.

Error Correction

January 2022, the Trust re-evaluated the methodology of calculating financial highlights per unit performance.

The Trust determined

that methodology used to allocate performance per unit

Osprey Bitcoin Trust

Notes to the Financial Statements

As of December 31, 2021

between net investment loss and net realized gain (loss) and change in unrealized

appreciation (depreciation) on investment was not acceptable under GAAP (ASC-946-210-50), which resulted in immaterial error.

error did not change the net increase (decrease) in net assets resulting from operations per unit or net asset value per unit.

impact of the immaterial error correction on financial highlights presented below:

Financial Highlights - Per Unit Performance

(for a unit outstanding throughout the period)

previously reported

Correcting adjustment

Year ended December 31, 2020

Net increase (decrease) in net assets resulting from operations

Net realized gain (loss) and change in unrealized appreciation (depreciation) on investment

Net investment gain (loss)

Net increase (decrease) in net assets resulting from operations

Six months ended June 30, 2021

Net increase (decrease) in net assets resulting from operations

Net realized gain (loss) and change in unrealized appreciation (depreciation) on investment

Net investment gain (loss)

Net increase (decrease) in net assets resulting from operations

Nine months ended September 30, 2021

Net increase (decrease) in net assets resulting from operations

Net realized gain (loss) and change in unrealized appreciation (depreciation) on investment

Net investment gain (loss)

Net increase (decrease) in net assets resulting from operations

Other reporting

periods were not impacted by the aforementioned change in methodology, therefore were not presented above.

Subsequent Events

On February 4, 2022, the Trust

entered into a Custodial Services Agreement with Coinbase Custody Trust Company, LLC.

On March 11, 2022, the Trust delivered to

Fidelity Digital Asset Services, LLC, notice of termination of the custodial services agreement dated May 18, 2020, pursuant to

which Fidelity was engaged to keep in safe custody the Trust’s digital assets and to maintain and operate the Trust’s

custody account on behalf of the Trust.

The notice of termination will become effective on April 10, 2022.

On March 10, 2022, the

Trust transferred its custodied digital assets from Fidelity Digital Asset Services, LLC to Coinbase Custody Trust Company, LLC.

There are no other events that

have occurred through March 29, 2022, the date the financial statements were available

to be issued, that require disclosure other than that which has already been disclosed in these notes to the financial statements.

On January 13, 2023, the Sponsor

communicated to the Trust’s Unitholders that it is considering a redemption program for investors in the Trust and that such

redemption program would likely involve limited periodic redemptions of Units, although the Trust had not ruled out the possibility

of an open-ended redemption program.

There are no events that have occurred

that require disclosure other than that which has already been disclosed in these notes to the financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures